According to local historical records and folklore, Chanderi was founded by Lord Krishna's cousin Shishupala. The famous weaving culture started during the 2nd century and 7th century. It was situated on the boundary of two cultural regions of the state, Malwa and Bundelkhand. The habitation of Vindhyachal ranges has a wide range of traditions. In the 11th century the trade locations Malwa, Medwa, central India and south Gujarat gave its importance.
These Chanderi sarees are produced from three kinds of fabric i.e. pure silk, Chanderi cotton and silk cotton. Traditional coin, Flora art, Peacocks and geometrics are woven into different Chanderi patterns. The sarees are among the finest sarees in India and are known for their gold and silver brocade or zari, fine silk and opulent embroidery. The weaving culture or tradition has been available from the 13th century. In the beginning, the weavers were Muslims, later in 1350 the Koshti weavers from Jhansi migrated to Chanderi and settled there. During the Mughal period, the cloth business of Chanderi moved to its peak.