Indian artefacts bought by Australia may have been looted

Canberra's National Gallery of Australia (NGA) may be forced to hand back priceless ancient Indian artefacts after it was revealed they might have been acquired from an illegal smuggling ring.

The gallery has already been forced to hand over a statue, worth more than $4 million, but more pieces may have to be returned following the arrest of accused antiquity smuggler Deena Dayalan last month.

The NGA artefacts, an 1,800-year-old limestone carving, depicting a scene from the life of Buddha and a 1,000-year-old stone Hindu goddess Pratyangira, were purchased by the gallery in 2005 for $1.5 million from Subhash Kapoor, who allegedly obtained the pieces from Dayalan.

Illicit antiquities trade expert Jason Felch told the Australian Broadcasting Corp (ABC) on Monday that evidence was beginning to show the two pieces were stolen.

"Investigators in the US have had evidence for some time that those objects were supplied by illegal traders in India," Felch said.

A statement released by the NGA on Monday said the gallery would cooperate fully with investigations and would happily hand over the artefacts if they were indeed stolen.

"The NGA has conducted thorough provenance research into these two sculptures and is working closely with Indian authorities on the next steps," the statement read. "It is certainly possible they will be returned."

Felch said Dayalan allegedly organised thieves to raid ancient Indian temples, after which he would have the stolen pieces shipped to him in the US.

"He would then arrange for their export to Manhattan, where they were packaged and readied for market by Kapoor and then sold onto museums," Felch said.