NFT Market In India: What Does It Promise?

When actor Salman Khan announced recently that he was entering the NFT bandwagon, it renewed the focus on a booming sector that is as much admired as it is despised. Some believe NFTs, based on the same blockchain technology that powers the cryptocurrency industry, are allowing people a democratic platform to showcase their creations, while others say they are not sure about the longevity of the evolving technology. Despite some skepticism, non-fungible tokens are gaining wide popularity and, as Salman Khan's case showed, some acceptability as well.

Salman Khan is not the only celebrity who has joined the craze. Before him, megastar Amitabh Bachchan had announced he will launch his NFTs soon. There are many other celebrities who are eyeing the rapidly growing market.

What Is NFT?

The non-fungible tokens (NFTs) are blockchain-certified copies of real-world art, pictures, videos, music, pixelated punks that are unique and cannot be duplicated. Introduced in 2017, they have risen quickly to prominence when compared to cryptocurrency, though both of them are based on the same technology. Bitcoin, the first cryptocurrency, was launched in 2009.

Unlike cryptocurrencies, which are fungible or can be split, NFTs cannot be interchanged. Also, unlike any other traditional collectibles, NFTs enable the creator to be paid some amount each time the collectible changes hands. According to the online marketplace OpenSea, monthly sales of NFTs jumped from USD 8 million (roughly Rs. 60 crores) in January 2021 to USD 95.2 million (around Rs. 714 crores) in February. The pace of growth has gone up further now.

But not everyone is convinced about the skyrocketing price NFTs are fetching on auction houses. Some say even if you paint the exact copy of the Monalisa, you cannot become Leonardo Da Vinci, or the copy can't have the same value – monetarily or otherwise.

India Connection

Nonetheless, many Indians see an opportunity to tap the growing market and also reach out to the tech-savvy generation that is primarily propelling the sector. The launch of Amitabh Bachchan's NFT collection would be an interesting event to watch and understand how the sector is going to evolve in the country or its reach. 

In July this year, TV anchor Vishal Malhotra released an NFT, which reportedly sold for about 2.5 ethers, approximately USD 5,500 (at the time), which is around Rs. 4.12 lakhs.

India's NFT space got off to a start when WazirX announced the country's first NFT marketplace on June 1 this year. Soon, the online crypto exchange said it was flooded with applications from creators and collectors. Since then many exchanges have launched NFT services. Between April and June, Twitter said, the volume of conversations around NFTs spiked in India. During the three months, they grew by 43 percent.

Poets and artistes see NFT as a way to directly reach their audience and in the process also earn from them. Previously, they had to look towards traditional exhibitions and brands, which involved going through middlemen and the process was time-consuming and sometimes frustrating. Then YouTube and platforms like it offered a solution, but it did not work for everyone. NFT, on the other hand, offered them a way to draw people and offer them a personal experience. Investors also feel a sense of pride in owning something that is unique.