Those in the curry trade blame increasingly sophisticated competition from supermarkets, poor service and a reluctance among second-generation Anglo-Asians to run family businesses.
The popularity of travel to the Indian subcontinent is also thought to be partly responsible. People are no longer satisfied with "Anglicised" ultra-hot curries and want to enjoy the more subtle and authentic flavours from coastal regions such as Kerala and Goa, or southern Indian vegetarian fare.
The number of Indian restaurants, which grew from around 100 in the early 1960s to 8,000 in 1997, has hit its peak. Balti restaurants, which have been at the heart of the boom in Indian food since they opened their doors in the West Midlands in 1974, are now the first to feel the squeeze.
"For the first time, the number of restaurants didn't go up last year. It has hit a plateau," said Iqbal Wahheb, a restaurateur and former editor of Tandoori, the trade journal of the curry industry. "It's a sign for restaurateurs to move on."
Indian restaurants are struggling to match the convenience that supermarkets can offer. Working professionals - for so long the typical curry-house customer - can now buy cheap, high-standard, ready-made curries from supermarkets on their way home, so avoiding driving into the less salubrious areas of towns where curry houses are often concentrated. "Supermarkets realise they can reproduce the same dishes at a more reasonable price and are making millions out of selling sauces, spices and pastes," said Mr Wahheb, who once sparked outrage when, writing in Tandoori, he lambasted Indian waiters as "miserable gits" who made eating out akin to attending a funeral.
Yet new restaurants could thrive if they diversified, according to Mr Wahheb. "The new generation of Indian restaurateur is emerging and they'll need to give people more of a taste of the different regions of the subcontinent. People travel a lot more now and want to taste the food from Goa and Kerala.
"If curry houses just go on selling the same stuff you can get in the supermarket, they will close down and we don't want to see that because the curry- house experience is now a part of the British social fabric. They have to come up with the next big thing after balti and try to be one step ahead of the supermarkets."
Baltis and other Indian restaurants can still be big business, involving average turnovers of pounds 500,000 a year. In the Birmingham suburb of Sparkbrook, 70 restaurants generate pounds 10m a year. In Birmingham, the city's 350 curry houses bring in pounds 175m annually. Across Britain, ethnic restaurants bring in pounds 1.7bn and employ 75,000.
But there are serious economic implications for the communities where balti and curry houses are based. Many of the restaurants are in less prosperous parts of Britain's cities and are seen as a vital source of income for the surrounding communities, creating secondary employment in off-licences, pubs and shops.
"Some of the first Indian restaurants opened because Asians faced discrimination in other jobs. These restaurants are often in deprived areas. The environment has to be improved to encourage people to eat in the Balti zone," said Tariq Chaudhry, business development manager of Birmingham Asian Business Association.
The Asian Balti Restaurants Association, which represents 59 restaurants in Birmingham, has sought funding for better street-lighting and to generally improve the environment in the areas around balti houses. "The interest is still there. The cheapness of a balti used to be a selling point but a lot of restaurants are now focusing on quality and improving their environment," said the association's Erfan Hussein.
Poor hygiene and service have been pinpointed as major factors in the failures, but a cultural change is also taking place within the Bangladeshi and Kashmiri communities which run most Indian restaurants. "They are family-run and passed down from father to son. But the young find their fathers' lifestyle very tough so they're going into higher education instead," said Mr Chaudhry.
It is a view echoed by Manish Sood, business development manager for the Academy of Asian Culinary Arts at Thames Valley University. "Second- generation Asians aren't going into the business and it's harder to get chefs because immigration laws now mean you can't bring them in from the subcontinent. The demand for good chefs is exceeding supply."Reuse content