Delhi's modern murals: Street art festivals and extraordinary outdoor galleries

"It's like a city within a city," says Hanif Kureshi, organiser of St.Art, a street art festival in Delhi and Mumbai. He is describing Delhi's Hauz Khas Village, which has turned into an extraordinary outdoor gallery since the first festival. Imagine London's Shoreditch, but set by a lake, overlooking the foliage-fringed ruins of domed 14th-century tombs and pavilions. "It was an ignored part of the city, where there was random development," he says. "So we were just adding a bit of colour to that chaos."

The success of last year's inaugural St.Art in decorating Delhi's urban villages and public buildings has seen the festival go from strength to strength. The first Mumbai edition has just finished, and the second Delhi event begins on 20 January, with nearly 20 international and Indian artists taking part for a month.

India's capital enfolds many different stories within its 25 million-strong sprawl, and Hauz Khas Village is one of these. It is at once a residential area and a centre for artists, designers and upscale boutiques – a network of narrow lanes and low-rise buildings, haphazardly extended as the owners woke up to their sudden increase in value.

In the late Nineties, young artists flocked to this southern neighbourhood to occupy what were then cheap studios, making use of a smattering of restaurants and bars. Today, its popularity has soared, reflected by its new landmarks: Delhi Art Gallery; French patisseries; Ogaan boutique, which stocks India's most chic designers; and hipster tearooms. Queues of cars line up to drop off cool young locals from Thursday to Sunday night. A once-ignored part of the city, this is now Delhi's most happening place to be.

Hauz Khas means "royal tank" and it was Alauddin, the second Khalji ruler of Delhi, who constructed the vast pool here in the 13th century. The tank lies at the centre of rambling parklands, balm to the senses after a spell in the capital's traffic. The surrounding greenery is reflected on its surface while rust-red domed, colonnaded tombs protrude from the grasslands like islands. Beyond them is a park, enclosing more tombs and skittish deer. Couples stroll between the upturned stones, looking for somewhere quiet to sit.

I step inside the tomb of 14th century Islamic Emperor Firoz Shah, its ceiling adorned with spidery patterns, interwoven teardrops, circles, and a star – 14th-century street art, perhaps. Hauz Khas has long been a centre of creativity and learning. I climb the steps to the lakeside ruins of Madrasa-e-Firoz Shahi – a great Islamic school built by Shah – and stand in front of architecture that could form a background for a Moghul miniature painting, looking across to the higgledy piggeldy apartments of the village.

Ruchika Sachdeva, a local fashion designer, explains: "I think it was actually the street art that got creative people back here, because it had started to pull in a very different crowd. While the street artists were there, and they started to do these very beautiful paintings, I saw a lot of people who had stopped coming starting to return."

Re-entering the village, I walk through a tunnel painted a deep, fleshy pink, to the Hauz Khas Social, a bar and self-styled "hub for creatives", with views through plate-glass windows of the greenery, where young Delhi-ites have meetings over their laptops and sip Long Island Iced Teas from test tubes. Nearby is the Kunzum Travel Café, where you can lounge on floor cushions reading travel books and pay what you like for coffee.

I start to look for the bohemian Rose Hotel (therosenewdelhi.com), with views over the forest. It takes a while to find it, and I walk through the backstreets of a basti (slum), passing children dressed in flame-bright colours and a tailor working his old Singer machine outside his house.

The houses are painted in blues and pinks, but there is something different here. Above several strings of washing, a cartoonish, turbaned man casts a sidelong glance at a fantastical machine, which proffers him a heart. This is Heart Exchange, painted last year by Brazilian and Indian artists Secordeiro Art and Yantr. Turning a corner, I see delicate blue, white and pale brown faces, which gaze out from above a scrubby-looking garage, the work of Italian artist Alina Vergnano. Later, Alina tells me that this was an impromptu work: local people asked her to paint here after seeing her towering commissioned painting, which marks the entrance to the village.

I have heard that there's even more street art in the larger urban village of Shahpur Jat, so I bump there in an auto-rickshaw. It's nearby, but feels undiscovered in comparison to Hauz Khas. It's full of boutiques selling handmade jootis (shoes) and glittering dresses that whisper of parties yet to be attended.

It is also full of street art treasures. Ranjit Dahiya's Pop Art Bollywood image looms colourfully over the neighbourhood, the female figure's eyebrow raised quizzically, and a painting of an enormous cat playing with a ball of wool has become a local landmark. There are so many paintings here that Delhi listings site the Little Black Book now offers tours.

St.Art may have turned Hauz Khas and Shahpur Jat into outdoor galleries, but this time the festival organisers' ambitions are even bigger, looking to bring art to more people. The government was so pleased with last year's works – a 968m-long mural and a poem written by a female prisoner on the wall of Tihar Jail (Asia's largest prison), and a 45m-high portrait of Gandhi on Delhi's Police Headquarters – that it has given the festival its blessing.

This year, St.Art will spread out beyond the villages to decorate more public buildings in Delhi, as well as Khan Market, the capital's most exclusive shopping district. "This time, we want to change the overall landscape of the city," says Hanif Kureshi. He appears to have made a good start.

Getting there

Air India (020 8745 1005; airindia.com) flies from Birmingham and Heathrow to Delhi. British Airways (0844 493 0787; ba.com), Virgin Atlantic (0844 209 7777; virgin-atlantic.com) and Jet Airways (0871 226 1737; jet2.com) fly to the city from Heathrow.

Visiting there

St.Art (st-artdelhi.org) runs from 20 January to 20 February, but the paintings will remain after the festival. To tour street art in Shahpur Jat, contact the Little Black Book (littleblackbookdelhi.com).

Delhi Art Gallery (delhiartgallery.com).

Ogaan boutique (ogaan.com).

Hauz Khas Social (socialoffline.in).

Kunzum Travel Café (kunzum.com/travelcafe).

More information

incredibleindia.org