Zari Industry Losing Glitter Amid Turbulent Times

Small scale units in India's zari industry are facing a tough time. A double whammy of fluctuating prices and the bleak global economic outlook has adversely affected the top-line growth and revenues of small and medium enterprises (SMEs), which constitute a major segment of the zari industry. Many of these firms have reported loss of business during the past few months. Zari suppliers across the country are facing an acute shortage of demand for zari from sari makers and imitation jewellery manufacturers. The contraction of orders along with rising operational costs has left the industry in a dire state.
Traders in the sector are vexed by the fluctuating prices of silver, gold and copper, which are the chief raw materials required by the zari industry. During the past few months, small scale zari makers and suppliers have suffered heavy losses owing to the volatility in raw material prices. The traditional zari manufacturing centres-Surat in Gujarat; Bareilly, Varanasi and Agra in Uttar Pradesh; and Jaipur and Barmer in Rajasthan are witnessing a 25% to 35% decline in business volumes. Moreover, small scale sari suppliers, who were hoping that the wedding season would boost the demand for zari, are also largely disappointed. This year, the wedding season too has failed to perk up sales and draw additional revenues.
Given the market situation and the low demand for genuine zari, small scale manufacturers are compelled to switch to cheaper raw materials like polyester film coated with aluminum. While some traders are not making fresh purchases, others are resorting to other businesses like textiles and jewelery to beat the slowdown. With raw materials becoming expensive and demand for zari recording a sharp fall, the SME zari manufacturers are left with no option but to cut down their production till they find buyers for their existing stock. As it may take a while for the market to recover, small zari traders need to tread cautiously.