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Anupam Poddar's new building looks like any other commercial edifice rising into the skyline of Gurgaon, a New Delhi suburb that has become synonymous with India's new economy. But inside, it's a different world. Instead of containing the cubicles, boardroom tables and ambitious young professionals that fill the neighboring high-rises, this one is crammed with contemporary Indian art.

All of it comes from the private collection of Poddar and his mother Lekha. The Poddars own a successful paper and construction business, but they are also patrons of the kind of art that doesn't hang neatly above a sofa — a pair of motorized mechanical cattle skeletons; a massive, gleaming cluster of stainless-steel utensils; a haunting video installation of a young artist pantomiming a bird's first flight. Their taste in art leans toward the "cheeky, ironic and witty," Poddar says. "If it will continue to excite, engage or challenge us in the long run, then we go with it."

The pair are part of a new breed of Indian art collectors whose fortunes have risen with India's economy — but who are not spending their riches on the established masters of India or the West. They seek out young artists, even those right out of art school, and collect their work with rigorous, passionate interest. The market has already boomed and bottomed but the serious collectors remain — and their sustained commitment is quietly transforming the Indian art world.

To understand where Indian art is going, it helps to look back. The fine arts in India depended on royal patronage — by the maharajahs and nawabs of India's princely states — well into the 20th century. After independence in 1947, the country's few industrialist families became the most important collectors, but the field remained as insular as their privately held companies. Over the past 10 years, India's economic boom created a new class of affluent, salaried professionals, particularly in technology companies. "The collector base has really increased," says Himanshu Verma, a curator and art consultant in New Delhi. "There are more corporate executives with greater disposable income."

But this new burst of demand rapidly pushed up prices and attracted speculators, generating a frenzy in India similar to the ones that engulfed the U.S. and European markets. An Indian auction house, Osian's, even began marketing a sort of mutual fund for fine art. Artists, too, developed unrealistic expectations. "Everyone wants to be Damian Hirst overnight," says Mumbai gallery owner Jai Bhandarkar.

Buffeted by the global economic crisis, India's art bubble has deflated, with some pieces fetching just a quarter of what they once sold for. But art-world insiders say that's no bad thing. The collapse has driven out both the investment-driven buyers and those artists who succumbed to the temptation to produce derivative work simply because it sold well. Says Verma: "The quality is coming back into collecting."

Accompanying it is a new drive to display these private collections in public spaces. State-run museums are devoted primarily to antiquities and a handful of acknowledged modern masters such as M.F. Husain and Amrita Sher-Gil. The vast majority of modern Indian art is either in private homes or displayed only when it's for sale in commercial galleries. The Poddar family opened the Devi Art Foundation partly because the collection had overtaken their home, and also because, as Lekha Poddar explains, the artists had a significance beyond her own pleasure. Galleries would "constantly direct people to our home," she says. "If it is important enough, then why don't we think of making a foundation? This gives it a public domain." Free and open to the public, the foundation is, in effect, India's first museum of contemporary art.

Not every Indian collector, of course, is trying to be the next Dominique de Menil or Henry Clay Frick, whose private collections are now significant museums in Houston and New York City, respectively. But they are serious about sharing their newfound enthusiasm. Swapan Seth, an advertising executive and collector in New Delhi, rents out an empty flat every few weeks to show off his latest finds to his friends, curating the shows and hanging the pieces himself. He spends at least two hours a day reading about art, educating himself about the artists he likes and how they fit into the world's larger artistic community. Seth buys most of his art online, but when he wants to see something in person, dealers in London and New York City will go to him. "They have an acute sense of the Indian collectors," he says. "A lot of gallerists want to get to know you."

It's not just the galleries that are finding a steady market in India. The auxiliary professions — everything from archivists, curators and critics to conservators and technicians for lighting and hanging — are also seeing growth. "At one point you couldn't find people who were doing restoration," says Priya Paul, who buys art both for herself and for her family's chain of boutique hotels. These days, she and some other collectors are allowing their collections to be used to help people who would otherwise have to seek training abroad. Paul recently worked with the staff of digital archive Tasveer Ghar, who had received funding from Heidelberg University to catalog her collection. Poddar went even further and opened his entire collection to students at Jawaharlal Nehru University, who then curated the foundation's latest show. "They're going to be the curators and critics of the future," he says. "They need a place where they can make mistakes."

The push to professionalize art in India is also shaking up the old guard. Pramod Kumar, associate director of the private collection of Ibrahim Alkazi, says the biggest change is a new effort to catalog old collections that have been gathering dust or simply deteriorating for years. Without rigorous record-keeping, it's impossible to set rational prices or establish the provenance of a piece for sale. "It gives a reference point," Kumar says. "What are the origins for whatever has come before?"

Even the royal collections have come to see the necessity of modern methods. Udaipur's City Palace recently archived more than 18,000 photographs in its collection that date back to the 1850s, and in April opened them to tourists for the first time. Kumar believes that the current maharaja is all too aware that the palace's financial viability depends on making it a world-class attraction, and a museum is part of the package. The proliferation of new galleries, and the increasing profile of the art market, is forcing Indians to think about how they value the art of the past, present and future — and perhaps appreciate all of it more. More Indians are certainly being exposed to art than ever. "It's almost becoming like a way of life," says Mumbai painter Papri Bose. And you can't put a price on that.

• Jyoti Thottam
• A new breed of collectors is changing the way the Indian art world operates and views itself