The manipulation strategy is new to India, but it is an old art dealer’s trick. “It happens all over the world,” says Peter Nagy, co-founder of the Nature Morte gallery in New Delhi. He remembers having seen similar techniques in the New York City art boom of the 1980s, when he was working there.
In a March article, Forbes magazine dubbed the strategy “Pump and Dump”, writing about its extensive operation in the booming Chinese art market. “If it were penny stocks being peddled, all this would go under the label of market manipulation,” Forbes noted. “In the art world it’s business as usual.”
While it may be unethical, in the unregulated art market the strategy is technically legal, and very difficult to pin down. After all, as Nagy says, for prices to rocket upwards, “you just need two maniacs in an auction house.”
Nagy has heard of specific cases where this has happened with Indian art. “But in a way, it’s marketing, and you can do what you want,” Nagy says. “Until now, the Indian art market was not big enough, but now it’s getting there, so it’s starting to happen.”
The success of pump and dump plays heavily on the ignorance of buyers, which still plagues the Indian art market.
Panda, who insists he does not maintain auction records and has only heard of cases of manipulation with other artists, finds himself urging buyers to really look at his work, and not just go by the name or the price. “There is no real understanding of art,” he says.
But even as they chart the contours of pump and dump, many point out that it has little future as the Indian market expands and deepens. While the manipulators may benefit in the short run, they are setting themselves up for a hard fall in the longer term.
Prices manipulated to great heights, while easy to set up, are difficult to sustain.
“People who invest study art keenly to see whether the returns will be worth it,” Visual Art Gallery’s Pande says. “So, I don’t think the bubble will repeat itself.
“It’s still a great time for Indian art,” Pande adds. “Some of the shoddiest work is coming out now, but also some of the best. Really, it’s like India in full motion.”