Indian art offers high appreciation in volatile climate

By Melanie Lee

NEW DELHI (Reuters) - Indian art might be just the solution for investors seeking a safe haven at a turbulent time.

Take a vivid landscape by avant-garde artist Francis Newton Souza hanging on a wall in Indian art dealer Ashish Anand's New Delhi gallery. With a price tag of $400,000, the painting might not seem like a bargain but Abnand says it will probably be worth $2 million within the next two years.

Art dealers and experts say the Indian art market is still undervalued and there is money to be made in local art for those with the means to pay the six figure prices that works by some of India's leading artists fetch at auctions.

"I think Indian art is a one-way bet in the long term. That's why I will allocate money to it," said Philip Hoffman who runs the Fine Art Fund based in London.

"If you look 50 years down the line, what you pay now is peanuts compared to what you will have to pay for the great Indian artists," he told Reuters at an Indian art summit in New Delhi in August.

The prices of Indian art have gone up considerably but not at the levels of Chinese art, which has seen prices soar due to enormous interest at home and abroad. Dealers believe Indian works have plenty of room to appreciate, especially as South Asian art begins to draw a Western audience.

"The growth potential is huge," said Hugo Weihe, Christie's international director of Asian Art.

"The Indian art market is particularly strong within India and that's different from the Chinese contemporary. You have that component plus we are now reaching out to an international component every season."