Also likely to help: The Gaitonde record sale took place in India and Christie's raised a total of nearly $15 million, which, according to the auction house, set a record for India and analysts said it offers validation of the domestic art scene.
Growth is here
The upsurge in interest in the Indian art market is being seen across the supply chain. The jaw-dropping prices fetched by some Indian masters' works at international auctions is inspiring buyers back home. The local Indian economy, with collectors from smaller Indian towns as well, is supporting the domestic art scene, said Kirpal, adding that the stagnation in some of the developed art markets is pushing galleries to emerging markets.
"India is only just starting; there is a lot of headroom," said a market observer. "Everyone is looking to India for growth in all sectors, so also in art."
The recently concluded India Art Week in Mumbai, organized by India-based auction house Saffronart, was another example of the revival in the market. "There is a lot of pent up demand. People are looking at Indian art as investment. There is also a new pride in Indian heritage," Hugo Weihe, CEO of Saffronart, told CNBC.
He added that this was evident in the interest shown in Indian antiquities, or art pieces that are at least 100 years old. "A bronze figure sold for nearly a million dollars (during the art week). That's a very, very big step for India," he added.
Some analysts said the latest buoyancy in the market is different from the frenzy of the pre-Global Financial Crisis era, when a lot of bad art managed to fetch high prices.
Now that the bubble has burst, there is a recalibration of prices and people are getting picky. "There is a demand for exceptional pieces. Masterpieces are scarce and desirable, therefore you see these record prices," Weihe of Saffronart said.
I too can buy art
While seasoned international collectors and institutions may largely be driving the high-end of the Indian art market, the diaspora and local Indians are fueling the more affordable segment.
Rekha Bajpai Misra, a banker in New York, said she's been buying Indian art for the past few years "out of nostalgia …but in doing so I managed to pick up some in-demand young Indian artists as well." She said she's spent about $20,000 on her Indian artworks.
The Internet can be a great resource for sourcing new contemporary artists. Not only are there websites that deal solely with new talent, but younger artists are also actively marketing themselves on social media.
The people buying these works often are not seasoned collectors, but first-time art buyers, who are using their income and not their wealth to buy art, analysts said.
It's an arena frequented by company executives, entrepreneurs, and professionals, such as doctors and lawyers, who are spending their salaries on art when still in their 30s.
"The market for pieces from 40,000-100,000 rupees ($600-$1,500) is growing and is competitive. If you pick up the right new talent and keep the painting for a few years, there is a 40 percent upside for most artists," said Anoop Kamath, who has been publishing the blog mattersofart.net for the past 10 years.
Some are specializing in this market.
Namu Kini, owner of Bangalore-based Kynkyny, which has promoted 300 artists over the past 11 years, said the art gallery has been running at a profit because it sells affordable art. "At 15,000 rupees ($225), you can get an original piece from an artist who is regularly producing quality works," said Kini.
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