Check authenticity and costs before buying art; keep allocation small | Personal Finance
Turnover in India’s secondary art market reached ₹2,543 crore in 2025, up from ₹792 crore in 2015, according to 360 ONE’s The Collector Guide. Rising wealth and wider exposure to art have fuelled interest in collecting. But investors in this alternative asset class should be wary of high transaction costs, limited liquidity and significant authenticity risk.
Why art draws buyers
Galleries, museums, art fairs and cultural institutions are bringing new audiences into the market. “We are seeing a broader and more confident culture of collecting,” says Jaya Asokan, fair director, India Art Fair. Younger buyers increasingly research emerging artists.
Wealthy investors increasingly seek new investment avenues. Scarcity attracts buyers to the works of established artists. “Art is a scarce asset, especially if the artist is no longer alive,” says Tushar Jiwarajka, founder and director, Volte Art Projects.
Value beyond returns
Art allows buyers to enjoy an asset while they own it. “Besides the fact that it gives you a return, you also derive pleasure from the work of art every day,” says Jiwarajka.
A collection can reflect its owner’s interests and can be passed on to the next generation. “A work can appreciate financially over a long period, but it also has cultural, intellectual, historical and deeply personal value,” says Asokan.
Understand the risks
The art market, too, is subject to cyclicality. “It has its own cycles of euphoria and despair,” says Avinash Luthria, Securities and Exchange Board of India (Sebi)-registered investment adviser and founder, Fiduciaries.
Art is highly illiquid. “It generates no returns while it is held and entails significant transaction costs that erode returns,” Abhishek Kumar, Sebi-registered investment adviser and founder, SahajMoney.com.
Asymmetry of information poses another risk. “Less knowledgeable outsiders risk transferring wealth to better-informed insiders,” says Luthria.
Uninformed buyers also risk falling prey to fraudulent practices, including chandelier bidding, wherein someone pretends to be a bidder when they have no intention of buying, to push up the price during an auction.
Poor storage and maintenance can reduce an artwork’s value. Dampness and direct sunlight can damage it. “Repainting, relining, tears and fading reduce an artwork’s value. Heavy restoration can also spoil a painting,” says Vikram Bachhawat, director at Kolkata-based Aakriti Art Gallery.
Who should invest
Only those with insight into the art market should invest. Luthria cautions that many who believe they possess such insight may be deluding themselves.
Choose artists carefully
First-time investors should avoid unknown artists. At the same time, the costliest names may not always the safest choice. “The prices of leading names may already reflect much of their appreciation potential,” says Bachhawat.
He suggests looking for senior artists with long, documented careers, a consistent body of work and a record of exhibitions, whose prices have yet to catch up with their standing.
Check authenticity and title
Verifying authenticity before a purchase is crucial. Check the work against the artist’s catalogue, if available. If copies of an artist’s works are common, consult someone with experience of handling their work.
Do not accept unsupported claims that a work comes from a private collection. “Seek evidence of ownership history, such as a gallery bill, auction record, collection label or exhibition listing,” says Bachhawat. Walk away if an artwork’s history is vague as a lower price cannot compensate for doubtful provenance.
Confirm that the seller has clear title and can legally sell the work. Do a proper assessment of its physical condition. Obtain a bill in your name recording the artist, title, medium, size, year and price.
Set a budget
First decide how much of your net worth you can commit to art. “Beginners should initially deploy 10 per cent of the amount they are comfortable committing, then expand gradually,” says Jiwarajka.
Experts put the minimum corpus for a credible portfolio at ₹10 lakh. “The budget must be adequate to cover transaction fees, insurance and maintenance without concentrating too much capital in one asset,” says Kumar.
Holding period and allocation
Art markets move slowly, and even a good work may attract little interest for years. “Choose a work you would be happy to live with regardless of market movements,” says Asokan.
Money needed in the near term should be kept out of art. “Allow a minimum holding period of seven to 10 years; 10 to 15 years is safer,” says Bachhawat.
Kumar suggests limiting art to a minor allocation, typically 2 to 5 per cent of total net worth, so as not to have too much of your asset tied up in an illiquid asset.
Precautions to avoid loss
Do adequate research before buying. Novice investors should seek informed advice until they have understood the dynamics of this market. “Pay a fair price rather than chase artworks that have seen prices rise in recent times,” says Bachhawat.
Finally, avoid unverified platforms. Buy only from reputable galleries or established auction houses that provide proper documentation.
