According to G Devarajan, chairman of the Cotton Textiles Export Promotion Council (Texprocil), the growth of cotton textiles export was maintained at $ 3.5 billion in 1997-98 as compared to $ 2.65 billion in the previous year. This year (1998-99) it was estimated to achieve 10 per cent growth in exports from the previous year level. ``However, going by the current trend, this may not possible to achieve by March 1999,'' Devarajan said.

During the April-August period this year, exports amounted to $ 2.26 billion as against $ 2.44 billion in the same period of last year. The average price realisation in respect of cotton fabrics is Rs 21.73 per square metre in January-August period 1998, and Rs 21.72 per sq mtr in January-August last year. In respect of cotton yarn, the average price increased to Rs 125.52 per kg from 116.39 during the same period. The performance at Rs 9,204.63 crore exceeded by 5.11 per cent from Rs 8,657.51 crore during the January-August in 1997.

The industry's products are exported to over 185 countries with Asia accounting for about 41 per cent of the total exports followed by Europe at about 30 per cent, America about 13 per cent, Africa at 12 per cent and Oceania at 1.4 per cent. While exports of cotton textiles (cotton yarn, fabrics and made-ups) had been growing at an average growth rate of 22 per cent during the last five years, in 1997-98, it slowed down recording a modest growth of 6 per cent with growth of cotton yarn at 4.3 per cent and fabrics and made-ups at 7 per cent.

However, the slowdown in the global economy with the falling commodity prices and the continuing recession in Europe has drastically affected India's exports growth prospects in the current year. ``With our competitive ability having been already eroded by the deep depreciation of the currencies in South-East Asian nations vis-a-vis a stable rupee,'' Devarajan said, ``future growth prospects would be linked to the increasing uncertainties of a globalised world economy where strong protectionist textile lobbies with preferential trade arrangements continued to exist, restricting the free movement of goods.''

Besides falling export realisation, he said exporters were facing several problems at home such as high domestic cotton prices, high bank interest rate, rising energy cost and spiralling employees wages. Further, the industry's competitive ability is being continuously eroded with higher incidence of taxes and duties and high cost of working capital. Quoting a study, Devarajan said that the interest rate accounted for about 35 per cent of the manufacturing cost in India whereas it was 14 per cent in the US and 18 per cent in Italy.

The unhealthy and uneven competition from the decentralised sector has also led to a steady deterioration in the finances available for modernisation of the organised manufacturing sector. In this context, he emphasised the need for immediate implementation of technological upgradation fund for the entire textile industry including spinning sector in order to survive in the free trade world economy.