INDIAN ART MARKET CONFIDENCE
The financial markets around the world are gradually recovering from a cardiac arrest, the banking system is being rebooted with help of government intervention and nationalisation. Most Western economies are heading for a recession. Emerging markets such as India and China have not been spared either, and the short-term economic outlook is highly uncertain.
Sentiment shift began May 2008
Now, this is the context in which the art market must be analysed. ArtTactic’s India Confidence survey in May 2008 signaled a shift in the sentiment, as respondents turned negative on the economy – 6 months after, the negative mood has now hit the Indian art market.
Confidence falls 23% May to September 2008
The recent confidence survey conducted in September 2008, showed that the overall ArtTactic Indian Art Market Confidence Indicator fell a further 23% from the last reading in May, which has resulted in a combined fall in the Indian Art Market Confidence of 34% since October 2007.
The ArtTactic Indian Art Market Indicator has been hit by 38% drop in the confidence in the economy, which is a further deterioration from the 54% decrease experienced between October 2007 and May 2008. Hence the economic component of the indicator has fallen 71% since October last year. This has to be viewed in the light of The Bombay Stock exchange (SENSEX) having lost more than 50% of its value between October 2007 and October 2008. With inflation levels at close to 12% and weaker industrial production numbers for August 2008, the Indian economy is feeling the gravity of the global crisis – a sentiment that is now starting to find its way into the heated Indian art market.
Speculation cited as cause
ArtTactic’s recent survey shows a significant fall of 36% in the Indian Contemporary Art Market Confidence Indicator, which reached its height in May 2008. The loss in confidence has been largely caused by speculation (73% of respondents saying this the biggest risk to the contemporary Indian art market), and rapidly rising prices of younger, still unproven contemporary artists, combined with a much weaker and uncertain economic climate.
So what does this mean for the future of the Indian art market? The changes are likely to take place on different levels. The most immediate; art prices and value of Indian art works will come under scrutiny, which is evident by recent results from auctions in London, New York and Hong Kong.
In the medium term there needs to be a re-assessment of the Indian art market, and questions around artistic, historic and cultural importance need to be debated, discussed and contextualised. The Indian art market desperately needs a non-market/ non-commercial reference frame for which it can questions its validity. The market needs more long-term players, particularly art collectors.
On the positive side, the Indian art market boom has laid the foundation for a healthier, second Indian art market cycle. The emergence of institutions such as the Devi Foundation are necessary, but one needs many more – as a single institution runs the risk of becoming an instrument for another speculative boom. The market needs a wide range of ‘voices’ that can maintain the checks and balances, and ensure that the value of art has a foundation outside the commercial market.
However, one should remain positive. Whilst the market will go up and down, artists and art will not cease to exist. Contrary, a difficult environment is likely to be more conducive for art production and creativity. It is in this new cycle, where the real, long term value of Indian art will be established.