BANGALORE, INDIA—Indian silk fabric production and export has hit the wall after almost three decades of ever increasing sales from 1985 to 2008 according to manufacturers and buyers.

Indian silk exporters that were highly sought after by American and European buyers for almost three decades are now struggling to survive in the business. Instead, fabrics made from silk blends and other natural fibers are being attempted instead of pure silk alone.

Chaitra Prints, a regular exhibitor at Frankfurt has stopped exhibiting since three years ago. “My customers from Spain and other markets said there is no demand for silk fabrics as the prices are high and their customers cannot afford it anymore,” says Manohar. M.N., a principal of Chaitra Prints, Bangalore. “The feedback from the customers was also clear that they would not visit the trade show any more, he added. “But we still remember the good old days where each order was valued at Euro 80,000 and is now down to Euro 15,000,” he recalled further. 

What ruined the business? Suppliers say it was the more than doubling of Chinese silk raw material prices and at the same time, the 35 percent depreciation of the Indian Rupee in the last 18 months. “Overseas buyers have found a good replacement in the polyester blended lookalike ‘silk’ look fabrics that are easy to clean and maintain. These are also far cheaper and therefore has replaced pure silk substantially,” observes Vikram Tantia, Managing Director of Globe (India) Limited, Kolkata. Trends have also moved towards linen and cotton instead of the shiny silk. But a revival is not foreseen in the near future unless silk prices correct downwards and the International market cannot afford these high prices, he added. The percentage of pure silk furnishings in the entire turnover has reduced largely and it has been strongly replaced by linens, cottons and blends.”

Unfortunately Chinese silk price started doubling coinciding with the melting down of US markets in 2008 as the purchasing power of American consumers dried up and Europeans followed suit. Chinese silk yarn prices went up from $26 a kilo to 56. As a result, exporting silk fabrics became a nightmare. (It is a fact that Indian silk exporters cannot use the local yarn as ideally Chinese silk thread is comprised of 18 to 20 filaments but the Indian filament count fluctuates between 10 and 20 making weaving difficult).

Normally, Indian silk is being used as a warp yarn for making Dupion fabrics only. For the weft, Chinese yarns are a must as silk is made from dried cocoon while Indian silk is made from fresh cocoons.This results in frequent yarn breakages. Silk alone was not an answer and commercial considerations were crucial to stay on course. 

China has its own problems in producing enough high quality silk cocoons. Its demand of silk has hit the bottom and arrival of lookalike polyester blends, which are cheaper and easier to clean will dent its silk demand. The urbanization of Chinese provinces, mainly silk-producing areas in the Shanghai region has reduced the cultivation of mulberry plants whose leaves are the only food for silk worms. Meanwhile China is said to be developing other regions but the cost of cultivation and labor has shot up making the silk worm production unattractive. Equally, China is making its best efforts to bring in new technologies and new facilities that will support latest high-end silk manufacturing machinery to further improve both the quality and the quantity of its silk. Though time consuming, once fully implemented some benefits are bound to accrue. The RMB appreciation and increased labor costs are adding up to keep silk price high in the marketplace and will keep silk fabrics demand subdued.