It may not be news for those already entrenched in Indian art, but in terms of the emerging art markets the Indians are definitely coming. "In the past few years, we have seen an art market buoyed by the new wealth and income of Indians based in India, and also by non-resident Indians (NRIs)," says Farah Rahim Ismail, director of , Aicon, London's premier gallery of Indian art on Heddon Street (the former space of the Gagosian gallery).

"They are simply taking a new interest not only in the modern masters, but in contemporary art. What they are doing, then, is buying back into their heritage. We are not sure when the tipping point was, but we have seen increased activity in the past five to eight years, and much of it was through a rush in online buying from sites such as saffronart.com and artsindia.com."

The group of "modern masters" to which Ismail refers consists of veteran artists, either recently deceased or in their senior years. They were members of the Progressive Artists' Group, founded by Francis Newton Souza in 1947 - artists who lived through colonial rule, were active in Gandhi's "Quit India" freedom movement, and were deeply affected by the violence surrounding the Partition of India.

For the greater part of their careers, these artists had only modest success, but gradually they have become icons in their homeland. Among them are Souza, Maqbool Fida Husain, Ram Kumar, Syed Haider Raza, Akbar Padamsee and Tyeb Mehta. From there, a somewhat younger grouping of artists in their mid-60s are also pivotal in the Indian contemporary art scene and include Laxma Goud, Anjolie Ela Menon and Nalini Malani.

It was in 2003, when Mehta's room-size triptych "Celebration" sold for more than $300,000 at Christie's in New York, that many observers claimed that the turning point for Indian art had arrived. For the buyer it was a very sound investment; in 2005, Mehta's "Mahisasura" went for $1.58m at Christie's in New York. Indian art was on the map.

Buyers of contemporary Indian art are not just newly flush Indians; Europeans and North Americans are also looking on south Asian talent with fresh eyes. "There is a lot of interest from non-Indian buyers who were collecting Chinese art but have been priced out of that market because of the soaring costs," explains Ismail.

Prajit K. Dutta, a partner of Aicon Gallery and founder of artsindia.com, says: "The Indian art market turns over roughly $300m of sales internationally, and much of it can be accounted for by the wealth of the Indian diaspora." He adds: "When you think that the Indian economy is growing at eight per cent a year it means there is a lot of spare capacity to buy. There is no doubt that potential buyers are in place.

"There is also a new consciousness of collecting among Indians. They are not just collecting art but also books, jewellery and so forth."

But are these savvy collectors buying up Indian art for the love of art, or for the investment value? Both, it seems. "If a buyer is spending about $5,000, then it is such a negligible part of a disposable income that it is really because they just like the piece," says Dutta. "Once you get to the $100,000 mark, you have to be concerned about investment value. I always advise potential buyers that they have to like the art first, but, at that price range, you can't ignore the economic reality of it being an investment."

Sant Chatwal, a Manhattan-based NRI, hotel tycoon and modern-day Indian Medici in the making, also buys for love and money. "I think the interest in contemporary Indian art has been fuelled by the high prices fetched by Indian artists at international auction houses. Today there is a frenzy to collect works in anticipation of rising prices. Art collectors are becoming investors to generate returns on their own art investment." Chatwal is particularly interested in the work of Ganesh Pyne, Jogen Choudhury, Arpita Singh, Anjolie Ela Menon and Bikash Bhattacharya, as well as upcoming artists Chintan Upadhyay and Pushpamala.

There is no doubt that works by artists such as MF Husain are already highly sought after by collectors (especially his later works) and, according to Ismail, prices for his best pieces have gone up in price by over 400 per cent (prices for some have reached the $1m mark). This puts him and his contemporaries out of reach for the vast majority of buyers. But there is a group of well-known contemporary artists that is still relatively affordable, and another group still who are on the rise.

The former, known as the "Bombay Boys", is a preternaturally hip group of thirty to forty-somethings, most of whom trained at the Sir JJ School of Art in Mumbai. They are India's answer to the "YBAs" and are receiving recognition far quicker than the masters before them. Like their predecessors, they are influenced by communal violence and poverty, but are also interested in modern issues: technology, terrorism and the environment. Marquee names in this group include Subodh Gupta, GR Iranna, Riyas Komu, TV Santhosh, Atul Dodiya and Baiju Parthan.

For keen collectors on a budget, there is another grouping of artists who are beginning to cut a swath through not just Mumbai and Delhi, but also through Manhattan and Palo Alto. Young, cheeky and brash, they include Akhilesh, Adip Dutta, Yogesh Rawal, Rathin Kanji, Debanjan Ray, S. Harsha Vardhana, Indrapramit Roy and Smriti Dixit. Their work with linear and modular shapes, audio visual installations and recycled junk is piquing the interest of collectors worldwide.

For Ismail, the changes in the Indian art market and economy can only be good: "The country has such a strong history in mysticism and belief, fantasy and story-telling, and that is being represented in its arts every day. It is a hugely exciting time for Indian art."

www.aicongallery.comwww.sothebys.comwww.christies.comwww.osians.comwww.paletteartgallery.com

...............................................................................

Benchmarking: India embraces the contemporary

The Indian art market is going through a major transformation, where the market's focus has shifted from modern Indian art to contemporary Indian art.

According to a report this month by ArtTactic, an art market research service which provides analysis and advice for art collectors, art professionals, art institutions and art funds, its contemporary art market Confidence Indicator now stands 20 per cent higher than the indicator for the modern art market. However, recent auction results show that there is still strong demand for the right period works by a selected number of modern Indian artists such as FN Souza, MF Husain, VS Gaitonde, Ram Kumar and SH Raza.

Western museums and private collectors have started to take a strong interest in what is happening in India at the moment. This will continue in 2008, with exhibitions planned at the Serpentine Gallery, the Saatchi gallery, the Mori Art Museum, as well as the current exhibition "Passage to India" at Initial Access, the space recently opened by UK collector Frank Cohen.

According to the ArtTactic Indian Art Market Confidence Survey, the overall Indian art market confidence indicator fell 13 per cent from the last reading in October 2007.

The indicator has been hit by a 54 per cent drop in both the current and future confidence in the economy. With India's inflation surging to a more than three-year high, with global financial markets in decline and with crude oil prices rising, the economic prospect looks less promising than six months ago. And as the economic component of the confidence indicator carries a 33 per cent weighting in the overall Indian Art Market Confidence Indicator, the significant loss in confidence weighs heavily on the overall results.

However, despite the fall in overall ArtTactic Indian art market confidence, both the confidence levels in the modern and contemporary market increased significantly: up 17 per cent and 6 per cent respectively.

After the slowdown that started at the beginning of 2007, where the modern Indian art market experienced a 38 per cent drop in annual auction volume compared with the record year of 2006, the modern Indian art market is now regaining some of the lost confidence.

The ArtTactic Indian Modern Art Market Confidence Indicator is up 27 per cent from the last reading in October 2007, and while the survey respondents are less positive about the near future of the Indian contemporary market, the "expectation indicator" for the modern art market stands 23 per cent higher than the "present indicator", showing the modern art market could be about to regain some of the ground that it recently lost.

www.arttactic.com

The ArtTactic Indian Market Confidence Indicator was launched in May 2007. It is derived from polling 81 respondents, including curators, collectors, dealers, galleries and auction houses operating in the Indian art market.