Saffronart continues to be the leader with its bold move into the world of jewelry auctions. While this first one was a charity initiative, they will have a Fine Jewels auction later this year. In addition, Bid and Hammer debuted in Bangalore two weeks ago, to be closely followed by Emami Chisel Art in Kolkata later this month, and Astaguru, an exclusively online auction portal run out of Mumbai.

Unlike China, the Indian art market has been largely dominated by galleries rather than auction houses thus far. (China is estimated to have several hundred new auction houses open every year). The entry of three new players at this stage could either prove beneficial or well spell trouble. Running an auction house is by no means easy. By their very nature, auction houses have the potential to greatly influence the market as sales are in the public domain, and, inherently, the process can be manipulated if it is not correctly regulated.

Until this point, India has not felt a need to create and enforce guidelines similar to what the Department of Consumer Affairs does in the United States or the Bureau of Cultural Heritage in China. Christie’s, Sotheby’s or any other auction house operating in the US is bound by strict codes and rules for what they are allowed and not allowed to do. These could relate to the type of information that must be disclosed to potential bidders, such as vested financial interests, or certain words that an auctioneer is not allowed to use while selling a lot as they could be misleading. As the auction industry is much younger in China’s, their regulations are focused on the start-up phase. New entrants are asked to prove competency in the business, both economic and art related, as well as show certificates for qualified auctioneers.

Now may well be the time to begin the process of regularising the auction business in India if we would like it to become an integral and real part of the market. Unfortunately, our barometer today still remains the results seen at international sales, as live Indian sales often lack the transparency that is so critical to the process. A good example is price lists. Prices need to be posted within hours of the sale, not days after. In some cases, prices are not made public at all. All auctions have “after sales” where unsold lots find buyers in the hours and days after the sale. That should not prevent the auction results from being posted in a timely manner.

The one aspect of auctions that cannot be regularised is quality. In an attempt to have several auctions a year to meet the high running costs of the business (online models are more economical), it is the quality of the works included in the sale followed closely by the inflated estimates that often lead to a rapid downward spiral. Average works are no longer easy to sell in a market that has become far more discerning. Low revenues and profits could eventually lead to the closure of the auction house, which in turn sends out negative signals to the market at large.

The auction business is a tricky one. An adrenaline rush, no doubt, coupled with nail-biting excitement if handled correctly. Information, education, research and knowledgeable resources are critical to ensuring the success of any new venture. Let’s keep our fingers crossed.