Indian art might be just the solution for investors seeking a safe haven in turbulent times.

Take a vivid landscape by avant-garde artist Francis Newton Souza hanging on a wall in Indian art dealer Ashish Anand's New Delhi gallery. With a price tag of US$400,000, the painting might not seem like a bargain but the dealer says it will probably be worth US$2 million within the next two years.

Art dealers and experts say the Indian art market is still undervalued, and there is money to be made in local art for those with the means to pay the six-figure prices that works by some of India's leading artists fetch at auction.

"I think Indian art is a one-way bet in the long term. That's why people will allocate money to it," said Philip Hoffman who runs the Fine Art Fund based in London.

"If you look 50 years down the line, what you pay now is peanuts compared to what you will have to pay for the great Indian artists," he said.

The prices of Indian art have gone up considerably but not at the levels of Chinese art, which has seen prices soar due to enormous interest at home and abroad. Dealers believe Indian works have plenty of room to appreciate, especially as South Asian art begins to draw a Western audience.

"The growth potential is huge," said Hugo Weihe, Christie's international director of Asian Art.

"The Indian art market is particularly strong within India and that's different from the Chinese contemporary."

Often depicting vivid and colorful scenes of Indian life and culture, Indian art has long been popular among wealthy nationals, whose ranks are growing rapidly in a booming economy.

Yet until recently Western collectors had not taken much interest in classical and contemporary Indian artists.

That is starting to change. Weihe predicts that sales of Indian art at Christie's auctions might reach US$30 million this year, compared with US$680,000 in 2000.

Asia's art scene has blossomed in the past five years driven by the continent's rapid economic growth. Valuations have skyrocketed as Asian art has become an investment for speculators and a symbol of affluence for a growing pool of local collectors.

The record for a contemporary Indian art work was set in June when Francis Newton Souza's piece "Birth" was sold for US$2.3 million.

The figure was, nevertheless, significantly lower than the US$9.7 million record price for Chinese artist Zeng Fanzhi's piece "Mask Series 1996 No. 6" sold at an auction in Hong Kong in May.

Works by famous Indian artists such as Maqbool Fida Husain and Syed Haider Raza currently go under the hammer for anywhere from US$200,000 to US$1 million.

Yet industry players expect prices to shoot up to between US$5 million to US$10 million in the next few years.

Neville Tuli, a manager of a US$400 million art fund in India, believes that Indian art will appreciate by between 18 to 25 percent every year in a climate in which art is increasingly seen as a secure investment.

But as with all investments, there are risks.

The Indian market is vastly different from the Western art markets because in India, art is viewed more as a financial investment rather than a collectors item, art fund managers said.

"It has gone up 200 times in five years," said Hoffman, of the London-based Fine Art Fund, adding that the Indian market consisted of 70 percent speculators and 30 percent collectors.

This trend of rapid buying and selling, makes it difficult to predict long-term value.

"You need the 'Bill Gates' of this world to say I want a Gupta and I don't give a damn how much it cost. It's going into my collection and it's not for sale," Hoffman added.

Art experts would like to see more people like Kusam Sani, a wealthy fashion consultant based in Delhi and one of the few art collectors who keeps what they buy.

"I have a 12-meter dining room which is covered with work, but I can't buy anymore because I've got no more space," said Sani, who has been collecting paintings since she was a teenager.