It was an evening at the Saffronart auction sometime in 2018, one of several throughout the year, the same swish set came around canapés and cocktails to celebrate the homecoming of the works of some of India’s finest master artists. The buying behaviour had still been tepid in the aftermath of what was the great economic overhaul that India had experienced–demonetisation–yet the crowd was hopeful. What started out as just another evening ended piquing the curiosity of a prudent few, most outside the art world’s usual suspects. An unassuming painting by VS Gaitonde sold for ₹ 15.45 crore, nestled comfortably at the lower end of the estimate, yet on the higher end of the spectrum, but the artist had earned his mettle being one of the foremost forces in Abstract Expressionism in India. The evening saw several other works overreach their higher estimates, reaching record-breaking counts.
A few months later, the market saw Sotheby’s make an entrance. It was what one can perhaps deem an inaugural auction, one that they had hosted well after the previous one in the late 90s. The roster of lots was flocked by names ranging from masters like Amrita Shergill, MF Husain and SH Raza to Modern contemporaries like BV Doshi and G Ravinder Reddy. It was the moment that the painting ‘Durga Mahishasura Mardini’ by Tyeb Mehta was announced sold, aficionados knew that this was the onset of an upward graph for Indian Contemporary Art. With most works going above the higher estimate at the hammer, it solidified the stance that India was overtaking Hong Kong in having its contemporary South Asian art moment and investors stood up to take notice of this little spoken about asset class.
The upward trajectory crawled slowly but steadily for Indian artworks. The Mei Moses Art Index corroborated that the contemporary art market showed great resilience during the COVID-19 pandemic and, in fact, the number of new and first-time bidders, too, grew at almost three per cent. Auction houses were seeing their moment with record trading volumes. The laughter at the evening auctions was quickly arrested in 2020 as the world entered the apocalyptic phenomenon–that of the pandemic. The onset of the pandemic had left in its wake confusion and fear among luxury-buying patterns. Most of us had suddenly become seemingly mindful and reluctantly practical with our spending patterns.
Amidst the chaos, however, there was a subset of society profiteering off the pandemic. According to economist Peter S. Goodman’s studies mentioned in his book Davos Man: How the Billionaires Devoured the World (2022), “the collective wealth of billionaires globally had increased by $3.9 trillion,” a solid chunk attributed to India as well. The pandemic, in its second phase, had given rise to healthcare and pharmaceutical moguls, crypto kings, stock market mavens and an abundance of influx of VC money, making the spending capacity of the ultra-rich even more than before. Says Roshini Vadehra, director of New Delhi’s Vadehra Art Gallery, “The pandemic added a new crop of collectors as people appreciated the love of art while being at home. Both new and seasoned collectors engaged with art through various digital mediums that added to the strength of the art market. There seems to be talk of a global recession which may have an impact in some areas, though the art market has often defied logic with stock markets.”
Unlike art, which is considered a “unique asset class,” i.e that there is only one of each kind of work, the prices of other luxury goods, too, saw a parallel rise. In the case of leather bags, accessories and watches, the rise is directly attributed to supply chain issues that slammed brands when the pandemic hit. The gamut of issues including the procurement of raw material (that led to price rise of the goods), the lack of logistical support and lack of easy accessibility (as most brick-and-mortar stores were unavailable to shop at) created a scarcity in the market, resulting in panic-buying. While the modest households stocked up on sanitiser, the privileged hoarded Rolex watches.
With people “saving” on travel, cruises, concerts and more, buying behaviour shifted to a psychological ease of conceived savings far removed from the impending inflation that was occurring. According to a study by Goliath Bain & Co., “Spending shifted from intangible experiences to tangible products in 2021. That’s visible in the different recovery trajectories of luxury goods vs. luxury experiences.” Herein, furniture and art did take centrestage, with more people spending time at home and shifting their focus to luxury living in their spaces. “As tourism collapsed by 80-90 per cent, spending on personal luxury goods by consumers in their home markets picked up the slack, rising by 50-60 per cent between 2019 and 2021, according to our forecasts,” said the Bain study.
Needless to say, after the feast comes the reckoning. The global markets have taken a huge tumble with the implementation of raised interest rates from the Federal Reserve, a move that always sees global repercussions. The stock market crash spilled over to both Indian Stock Exchanges, turning most aspirational purchases into quick regrets. Those high on the crypto throne were left answerable to the several they had converted into Solana geeks that had put their blind faith into tokens they barely understood. With the opening up of markets, travel and an influx of availability, what was once known as normal is now termed the onset of the recession. According to a study by WatchCharts that tracks demand and prices of luxury watches, the beginning of this year has already seen reduced demand even with the rise in prices, creating the illusion that the market is higher than it actually is. The only way art can see an out of this is by holding on to its stance of being a unique asset class coupled with the fact that the Indian art market has yet to reach its peak.