Art Fund for Indian Art (Part 1) - A Case for Revival
It is time the Indian art market started talking about art funds again.
Art funds started with much aplomb in India around twenty years ago and died an equally sudden death. Our conversations with some of the wealth managers who were involved in the process at that time, indicate that familiar issues of the art market, such as opacity of pricing, lack of liquidity, inability to predict sales time frame, stagnancy of sales, with fewer galleries and auction listing, as well as no institutional backing as some of the prime reasons. Private fund managers pretty much relegated this to be too obscure an asset to take a punt on.
So why after all this time we have pulled this rabbit out of the hat again? Well, several indications in the Indian art landscape over the last five years bear some re-looking. For decades, Indian art has occupied an unusual position in the investment landscape: culturally important, increasingly valuable, but still largely dependent on individual collectors. That model may now be approaching a turning point.
Through a series of articles, we explore why this is the right time for art funds to be formed, and what market fundamentals need to be kept in mind for this particularly selective asset class.
We start with factors which are redefining the art space in India, creating space for a larger conversation about structured financial instruments and the peculiarities of the art space.
The New Potential for Art Funds in India
The Indian art market has experienced a remarkable repricing over the past five years. Record auction results, a rapidly expanding collector base, greater international recognition and the arrival of younger high-net-worth buyers have collectively transformed art from a largely passion-driven purchase into an increasingly credible alternative asset class. So, it behoves us to think that the next logical step may be the creation of professionally managed, concentrated investment vehicles dedicated to Indian art.
In other words, India may be ready for the art fund—but the fund itself will need to be designed differently from the speculative vehicles of the past.
A market undergoing structural repricing
The most striking feature of India's recent art boom is not simply that individual paintings are becoming more expensive. It is that the market is developing stronger price discovery.
In the past few years, the Indian auction market produced several landmark transactions. Raja Ravi Varma’s Yashoda and Krishna sold for a record breaking ₹167 crore, the highest auction price for any Indian artwork in Saffronart’s Arpil 2026 auction, while M.F. Husain's Gram Yatra achieved approximately ₹119 crore in Christie’s March 2025 auction, Tyeb Mehta's Trussed Bull recorded ₹61.8 crore by Safrronart auction, and V.S. Gaitonde's Untitled work from 1970 work reached ₹67.08 crore in the same year.
The momentum has continued into 2026. Indian auction turnover reportedly jumped 87% to approximately ₹3,041 crore in 2025, while in the first half of 2026 modern art sales rose another 43.7% year-on-year to ₹1,548 crore. More revealingly, the average price per sold lot increased by almost 40% in H1 2026, while the number of lots sold increased only marginally.
So, a key understanding is that the Indian art market is not merely selling more art. It is slowly repricing scarce, high-quality art.
Supply remains a key factor for acquiring high-value marque works
In addition, in the current scenario, supply of quality artworks of recognisable names from auctions is inherently constrained. Artists such as Husain, Raza, Gaitonde, Souza, Mehta and Ganesh Pyne are limited, and a significant proportion of the best works are already held by museums, foundations and long-term collectors. As a result, when a major work comes to market, there can be substantial competition for it.
This scarcity is one of the characteristics that makes art particularly interesting as an alternative asset.
The collector base is changing
Another major development is the broadening of the buyer base.
India's wealth creation is producing a new generation of entrepreneurs, professionals, family offices and HNIs who are approaching art differently from earlier generations. Sotheby's reported that its Indian art sales more than doubled in 2024 to approximately ₹304 crore, with demand coming from millennials and HNIs buying both established modernists and lesser-known artists.
The change is also visible in the wider ecosystem. New galleries, museums, art fairs and private cultural institutions are expanding the market beyond its traditional Delhi-Mumbai collector circles. International auction houses are giving Indian artists greater visibility, while Indian galleries are increasingly participating in global fairs.
So, while the core collector base focussed on acquiring marque artists remains the primary mover of art pricing, there is a greater sentiment to understanding art an asset class and how new aspirational buyers can participate in this burgeoning sector.
Why individual ownership has limitations
For the buyers interested in participating in the growing art space, price, opacity of information about artworks, limited understanding of authenticity and provenance, pose a severe constraint.
Should a person buy just Husain or Raza, if these works were available? How will they handle long term risk of concentrating their portfolios to just a few names? What does diversification of portfolios in the art space mean?
In addition to the concentration risk, there remains the risk of limited expertise within the art space, with many instances of professed specialists committing fraud by offering dodgy paperwork and forged works.
Buyers, typically lack the depth to understand issues surrounding paperwork for authenticity and provenance, condition reports, exhibition history, literature, subject matter, and rarity. The Financial Times recently reported that the growth in South Asian art values has been accompanied by an increase in counterfeit works, making specialist due diligence increasingly important.
To compound it all, buying and selling art involves auction commissions, dealer spreads, taxes, storage, insurance, transportation and potentially long holding periods. The investor needs not only capital but also infrastructure.
Art Fund Imperative
These above factors highlight an industry primed for new capital inflow that can effectively capture nascent interest and curiosity into tangible investment model. A financial intermediary with specialist understanding between artist, gallery, auction house and individual collector. Indeed, one of the strongest arguments for an art fund for Indian art is that it can provide investors access to quality, authentic art.
The fund can potentially capitalise on the growing understanding that art is distinctive from other alternative assets, such that it is not just an investment product but a store of cultural value with inherent social and historic capital.
These are important distinctions for the market. Art cannot just be seen through the lens of a financial asset. Any structured vehicle must also understand the long-term social and cultural context of art, which creates a unique emotive value for not just the buyers and collectors but societies in general.
In the next article we discuss what, in our view, are factors which would affect the art fund, the depth of expertise required to create a unique entity, capitalising on the range, diversity and potential of the Indian art market.
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