Traders feel the global economic slowdown has affected the sales of Banarasi saris.
The new World’s economic disorder couldn’t have come at a worse time for this ancient city. After almost a decade, when the local silk industry was just beginning to witness signs of revival early this year, the slowdown is pushing it back again to where it belonged — in the twilight world of uncertainty and losses.
The famous and complex narrow lanes in Varanasi are not only hotspots for bewildered foreigners as the tourist season starts here but also host a large section of the city’ silk trade. Mukesh Agarwal, owner of FABCO and president of the Eastern UP Exporter’s Association, is one such businessman who feels exasperated at the current situation.
“I had a permanent client in the US and his orders were always in the range of Rs 60-80 lakh. Since September, he has already skipped three orders,” says Agarwal.
In the Kachori Gali near Vishwanath temple, Shiv Kumar of Banarasi Saree Factory says during the last 15 days domestic orders are also not picking up along expected lines. “I supply Banarasi silk sarees to Andhra Pradesh. Ahead of the marriage season, there should have been more orders but it’s not happening. I also see that my customers are settling for less expensive ones. Many customers who earlier bought sarees in the range of Rs 4,000-5,000 are now asking for sarees within Rs 2,000,” he says.
The rise and fall of share markets may or may not be an indicator of the Manmohan Singh government’s economic success earlier this year and the subsequent global crisis, its nadir. But Amresh Prasad Kushwaha, chairman of Benaras Weavers Welfare Association, feels the growth and the crisis also hit the silk market directly.
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“During the early months, we could feel that people had money in hand. The demand for traditional, expensive, handloom-made silk sarees was on the rise. We even increased the wages and employed more weavers,” he says sitting in his office at Ramnagar, a silk hub eight km from Varanasi.
The early trends gave hope to the industry that they might be able to overcome the lull this year. But ahead of the marriage and Christmas season — which is the peak time for silk sales — the global slowdown has hit the industry badly.
Traditional handlooms in Varanasi suffered a sharp decline during the last decade with the advent of powerlooms and as Surat started producing cheaper versions with synthetic materials. “On a handloom if Rs 500 is the labour charge, the power loom can make the same thing at a labour charge of Rs 100. If I sell a saree for Rs 1,200, I will earn 10 per cent profit. A similar powerloom saree, priced at Rs 900 will earn a profit of 20 per cent,” says Kushwaha.
And now, the new economic evil arrives. “It’s too early to give precise estimates. We exported silk products of at least Rs 500 crore annually from Varanasi. But already each exporter is facing a decline of 30 to 40 per cent in orders,” says Agarwal.
Union Textile Minister Shankar Sinh Vaghela held a meeting here with the worried exporters on October 17. “But nothing has come out of it. We want income tax concession under section 80 HHC. We have also asked for a reduction in import duty on Chinese yarn,” adds Agarwal.
“The film industry also contributed to a rise in demand in silk industry. In the much-publicised marriage of Aishwarya Rai and Abhishek Bachchan last year, Banarasi sarees were used. This year, Aishwarya was decked up in Banarasi sarees in the film Jodhaa Akbar. Customers came to us for those sarees,” says Biswanath Menon of Annapurna saree factory.
As the domestic market is still responsive, there haven’t been any major job cuts yet in the Chowk, Madanpura and Kunjgali areas — the nerve centres of silk business. “But we are worried about what will happen tomorrow,” says Nasruddin, a weaver of Madanpura. “If the situation continues like this, we will be forced to reduce workforce soon,” says Agarwal. The unorganised industry employs around 500,000 workers.
“Most of the exporters are seriously thinking about or have already started doing some other business,” says Agarwal before he attends another phone call from a worried colleague to discuss what their association should do now.