‘Indian art market is Rs 1,000 crore,but is only 1 per cent of world market’

Neville Tuli, chairperson of Osian’s, India’s largest art
auction house, tells Yatish Yadav that the Indian art market is maturing but needs the kind of push that Osian’s is providing.
In the end, he says, “only the historical dimension of art
determines the financial dimension”. And India has no dearth
of history or art.

How did your journey into Indian art begin?
I returned to India in 1994, after nearly 30 years in the West, with the intention of trying to change the educational system, while bringing greater love and respect to the arts. For nearly a year, I travelled across India, visiting our great architectural sites, contemplating the process for the task at hand. By 1995, I’d decided to set up a charity (HEART) and focus on Indian contemporary art as the first step towards building a university, with the fine arts, cinema, architectural heritage and the popular arts as the main subjects.

I realised that unless a respect for the history of the contemporary arts emerged, no change in mindsets would occur. At the same time, as one got deeper into understanding the system and its corruption, I began to sense that a charity would never be able to change the process or push the system into fundamental change.

As I travelled around India for the second time, this time focusing on contemporary artists and galleries, writing the book emerged in my mind as the next step forward. The book on Indian contemporary painting, The Flamed Mosaic, a seminal book, came out in 1996. The book cost Rs 55 lakh at that time, probably India’s most expensive. Naturally, how to cover the cost became an issue, given [the fact that] Indian publishing was, and is, floundering.

Hence, a deeper understanding of the need to build a financially-independent infrastructure for the arts, free of patronage, without compromising creative integrity, became a main concern. The concept of “the auction” seemed the right vehicle, as it was a platform to create excitement, financial respect and an archival knowledge-base. Soon, an institutional model was taking place in the head, but the larger 15-18-year vision only came after 1999.

Osian’s was established in 2000 as a pioneering arts institution in India with the vision of creating a new infrastructure and model for the Indian arts, culture, and its education, whereby a merit-conscious and financially self-sufficient infrastructure would be put in place, independent of traditional patronage systems yet grounded in its ability to be a key part of India’s developmental framework. Once this model was in place, the role of the arts and the creative community in India’s socio-eco-political psyche would change forever.

Osian’s has placed a lot of importance on cinema, sponsoring the Cinefan festival, and bringing out the historical memorabilia. Why did you venture this way?
Osian’s has systematically built the world’s most comprehensive textual and visual archive focusing on modern and contemporary Indian art, the popular arts, and the publicity material and memorabilia of world cinema. Recently, the Osian’s Archive and Library Collection took major strides towards building a significant presence in art forms such as miniatures, thangkas, and sculpture within India and Asia. It will become the hub of the university, which, in turn, will allow students a whole new ability to self-discover, long lost in our educational system, dependent on an ill-equipped teaching framework. Cinema was always part of the initial vision: the question was how that journey would begin and in what unique form. Having Cinefan and Cinemaya merge into Osian’s was a perfect start, which also brought Aruna Vasudev and her team into Osian’s, thus opening out a critical intellectual and artistic dialogue with Asian cinema.

Why did Osian’s venture into, of all things, football?
Getting into sports infrastructure-building seemed an inevitable task nearly two years ago, when it suddenly hit me that nearly 500 million Indians do not have the ‘surplus’ physical strength to have a mental dialogue with art, and that, hence, any development of the arts into the Indian psyche would face a major roadblock a few years later if we did not strengthen the body simultaneously.

Furthermore, the kind of links and bridges required to reconstruct India’s cultural infrastructure are much more complicated than most assume. The lack of facilities and support for a great global game such as football, which brought me great joy and fulfilment as a child, became a natural diversification once the opportunity arose. Re-imagining the potential of the Durand Cup, the oldest football tournament in Asia, run with dedication and love by the armed forces, was the right starting point. There is a long way to go before India can compete on the global stage, but it will happen.

Osian’s has been conducting auctions of historically-significant works? Will this help the art market grow?
The market is very strong, and growing in confidence and discrimination simply because it now understands and respects history better. Within a very short period of time, many other parts of Indian art will be getting their financial acknowledgement, as modern and contemporary art maintains its growing international respect. Major publications and the establishing of archives, museums, and schools on the subject are now envisaged over the next five to seven years. This boom needs to be institutionalised. Auctions of high-quality work are a key part of that infrastructure-building process.

Osian's first auction was held in 2001. What are the changes that you have witnessed in these five years in terms of art investment?
Osian’s first auction in 2001 was not only about teaching the country about the history of Indian art but also to create a value system for creativity. It was also the start of the economic growth. The February 2001 auction had an Average Lot Price of about Rs 1.4 lakh, while a similar quality auction in March 2006 had an Average Lot Price of Rs 65.5 lakh. Opening out the investment aspect of art was, thus, inevitable; today, it has great potential as a credible capital asset. The past five years have seen pricing becoming more transparent, banks accepting art as collateral, an art index being generated systematically, the launching of art funds and, most importantly, creating genuine excitement among the people about investing in art.

What are the chief elements that decide the value of art?
Artists who have developed their original style and established their body of work resulting in the achievement of historical significance over a period of 30-40 years are now getting recognised. In the long run, only the historical dimension of art determines the financial dimension.

How do you position Osian’s in the art market? Howdifferent it is from other auction houses?
Osian’s main concern has been to build the infrastructure for the arts in India. The Auction House is only a part of our work, one wing of the institution, though it might be pivotal generator of wealth. Other divisions try to redistribute the wealth in an effective manner. Further, the more the number of players, the greater is the transparency, competition and, hence, the quality of service for the public. The building of the knowledge base is our key concern, for others will not take on this objective as their vision is not one of a great infrastructure-builder, which one assumes is the role of government. Today, however, it is a mistake to let the government spend its scarce resources and energy in this field; the private sector can assume this role.

Who are the buyers these days? What is the art market’s growth rate?
Buyers today are well-informed, well-researched people who are witnessing the growing market and are willing to invest in the art market not only for the aesthetic value of the works, but as an investment alternative. The majority of our buyers/collectors are Indian (over 85 per cent of all transactions) with top professionals who respect knowledge, in general—such as doctors, lawyers, investment bankers, management consultants, software entrepreneurs and, now, growingly, corporate heads and banks—being our top collectors. In the future, there will be institutions, corporates, and financial institutions that will also start collecting Indian contemporary art in a systematic manner. Prices should continue to appreciate between 25-30 per cent per annum for the next five to seven years.

The Indian art market still forms only a small part of the world economy, barely one per cent of the world market. With the increasing purchasing power of the Indians across the world over the next decade, fundamental changes are expected—that is, once we build a credible knowledge base and domestic interest in the arts.

Even as you select an artist’s work for an auction, do artistic pattern or the kind of prior publicity they have got make a difference?
There are various factors that determine the selection of artists, but in Osian’s case, the overriding concern has always been to respect the historical significance of the artist and her or his work. This is a cardinal principle and, as a result, we have taken the lead in introducing more artists than any other auction house in the world. Further, unlike other auction houses, we curate our auctions, weeding out the majority of the works offered and trying to place only works that will stand the test of time, in our opinion. Marketing is but a shortsighted short-term approach that we have rarely seen to good effect. It is most overrated and very destructive for the careers of many artists.

Art investment is becoming a hot topic among many investors. A small canvas fetches Rs 1 crore and the appreciation value is rocketing. Will this survive?
The Indian art market is nearing almost Rs 1,000 crore, yet the market is still at a very nascent stage on a global scale. However, over the next six to 10 years, as infrastructure develops the role of the arts in India’s socio-eco-political framework, it will garner further momentum. As a full fledged mutual fund industry emerges and art is seen as a genuine asset, the market will fundamentally grow.

Financial institutions will soon be providing credit to the art market, and corporate policies will include purchase of art in a systematic manner, resulting in a major boost to the market. Currently, the market is in the first stage of maturity, but in the next three to five years, the boom will be tremendous. When the price of a Souza was Rs 1 lakh, it was too much, at Rs 10 lakh, it was overpriced, at Rs 1 crore, it is a bubble. When it reaches Rs 10 crore, they will say it must fall. This is the nature of Indian short- sightedness when knowledge does not exist and understanding the logic of wealth is lacking.

Will art investment might gradually transform itself into a professional market, just like any other investment industry?
Art is emerging as a genuine asset class in India. Another three to four years of work is required for it to rival all asset classes with credibility. It is inevitable for the inherent advantages of an aesthetic and historical object, with a financial and developmental dimension that is also very powerful, especially if the legal context supports the process. Remember the art object has been the world’s most expensive human-made object for over 5,000 years. There must be some inherent value that the financial system cannot manipulate. Therein lies its long-term integrity. Naturally, Osian’s plays a fundamental role in being custodians in the art world on many levels, apart from tackling issues of archival research, provenance, authenticity, valuation, and the like. Art will always have many advantages over traditional assets once its nature is better understood.