The yarn sector has emerged as a major forex earner.
While cotton yarn recorded a quantitative growth of 75 per cent in 1996-97, blended and non-cotton yarns registered an increase of 21 per cent.
The rupee depreciation will play a vital role in boosting yarn exports.
Sources said that depreciation beyond a particular level will prove harmful to imports and call for a balancing act.
Even then, competition is bound to increase as other exporting countries possessing a similar basket of export goods will eventually adopt competitive depreciation measures.
While the concept of free international textile trade has still a long way to go before achieving fruition, there are barriers such as the trading blocks of Nafta and Asean which do not augur well for the future.
Unless the protective walls are broken down, the developing countries stand to lose.
Exporters say that the recent Reserve Bank of India (RBI) fiat to increase post-shipment credit rate for 90 to 180 days by two percentage points to 15 per cent negates the rationale of concessional export finance.
The exporting fraternity is in need of competitive pre-shipment and post-shipment export rates in tune with major exporting countries.
Sources mentioned that spinning sector growth has been considerably impeded because of the anomalies in the excise duty structure.
Excise duty on polyester filament yarns has been drastically reduced by 34.5 per cent at just Rs 20.70 per kg from Rs 87.50 in 1991-92.
A drastic fall of nearly Rs 67 per kg in just 6 years, whereas the duty on polyester-viscose yarn which was Rs 10 a kg in 1991-92 has now been increased to Rs 18.63, an increase of 20.7 per cent.
They say that the excise duty paradigm has dealt a severe jolt to the blended yarn manufacturing industry, squeezing its wafer thin margins.
The distortion in the duty structure has curbed growth in blended yarns which in turn has weakened the demand for polyester staple fibre.
Sources said that a rational excise duty structure has to be evolved for the spinning sector in the overall interest of the textile industry.
Informed sources point out that the prices of raw materials, i.e. cotton, polyester, fibre,
viscose fibre, acrylic fibre etc. are more or less at the same level.
The manufacturing technology, whether for cotton or blended yarn, is again the same. Further, spindles enjoy interfibre flexibility.
They added that the Indian consumer prefers blended fabrics because of their intrinsic qualities.
As a result, cotton is emerging as a fibre for the affluent, while blended yarn is slowly gaining ground as the fabric for the general public.
They felt the share of blends must increase not only in the fabrics meant for clothing and apparels, but also in non-wearables like bed linens.
At present, cotton accounts for a 45 per cent share in total global consumption which is seen slipping to 42.2 per cent by 2000.
The global consumption of synthetic fibres which stands at 44.7 per cent is expected to improve to 48.3 per cent by the millennium.
