India Inc - CNNMoney
It hasn’t taken long for India’s fastest growing retail chain, Reliance Retail, to catch up with the country’s fastest appreciating consumer durable - modern Indian art. Launched last year by Reliance Industries - one of India’s two largest business groups - local Reliance Fresh supermarkets have been rolled out at a rapid pace, electronics shops were started last week [April 24] and 50,000 square-foot hypermarkets are expected soon. No surprise then that Nita Ambani, wife of Mukesh Ambani who controls the group, has suggested that “affordable” modern Indian art should feature as part of the company’s offerings.
International demand for modern Indian art has boomed in the past few years, pushed initially by demand from non-resident Indians (NRIs) in the United States who were (and still are) anxious to display their new-found wealth where it can be seen - on their walls.
Now modern art is becoming a “must have” commodity for many 30- and 40-something executives in India with surplus cash from lucrative occupations in the IT and allied sectors, as well as older collectors and some business houses. Prices have gone up more than 20 times in the past six years, and at least nine works by artists such as F.N.Souza, V.S.Gaitonde and Tyeb Mehta have fetched between $1 million and $1.55 million each in New York and Indian auctions over the past 18 months.
These are mostly veteran figurative artists, many in their 70s or older, but new generations are following, led by people such as Subodh Gupta and Atul Dodiya whose representations of modern Indian life - especially Gupta’s paintings and installations of pots and pans and bicycles - have been wowing experts in Europe and the United States. Modern and contemporary Indian art sales last month at Christie’s and Sotheby’s auctions in New York totaled some $24 million, but India can’t yet challenge China’s modern art prices, nor its coordinated displays like Hong Kong’s ArtWalk, which brought several thousand people to special shows a few weeks ago.
Art galleries have mushroomed across India’s main cities as demand - and prices - have risen and at least three art investment funds have been launched. So great is the activity - and the profits - that even the income tax authorities have become interested - and suspicious. On April 17, two leading auction houses, plus fund organizers and galleries in Mumbai and Delhi were raided by the Indian government’s tax inspectors. In a coordinated exercise, about 30 organizations were targeted. Groups of six to a dozen tax enforcement officials arrived unannounced at peoples’ homes, offices and galleries, demanded access and took away records for examination.
New buyers are at the mercy of gallery owners and artists, who demand high prices - even if the artists are little known and their work is not of sustainable quality. So what could be nicer than a chain of customer-friendly outlets that provide quality works by emerging artists, with good impartial advice, at what could be described as “affordable” prices - maybe from Rs10,000 to Rs100,000 (roughly $200 to $2,000) - plus limited edition prints of more expensive works?
That is the challenge that Mrs. Ambani, who advises on the softer side of Reliance’s businesses such as retail store designs, has set for her husband’s executives. One solution would be for Reliance to carve out a sizeable floor area in its hypermarkets, but demand would vary widely from one area to another, and the prices would inevitably exceed the budgets of most hypermarket customers. So an alternative being considered is to open a chain of Reliance art shops. That could bring affordable art to a broader public than currently frequents more upmarket and expensive galleries.
It would also enable Mrs. Ambani to upstage her sister-in-law, Tina Ambani, who is married to Anil, Mukesh Ambani’s younger brother. The two men split their mammoth group in 2005 and there is now intense rivalry. The wives are said never to have gotten along with each other which, many businessmen in Mumbai believe, hastened the split. Tina has led the family’s art interest and her annual Harmony Art show was opened in Mumbai at the end of March by Palaniappan Chidambaram, India’s finance minister, with 250 works by 128 artists. So let’s see what the other Mrs. Ambani can do.
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