Asian crisis had a debilitating effect on the cotton textile industry as it had deprived the exporters of huge markets. Cotton Yarn sector was the worst hit with exports coming down by 6.3 per cent in rupee terms during the period between January-September 1998. As the exporters struggle for an alternative market, yarn exports will fall way short of the targeted figure of $3.557 billion for the current financial year. The exportes are handicapped to explore the growing US market due to recent sanctions.Says a senior official with cotton Textile export promotion council: "The council has asked the government to allow exports to import raw cotton from the US for capturing the huge American market. But sanctions have jeopardised the entire plan."

Industry observers see a huge possibility in the untapped market of Russia. As the Russian buyersare not highly quality conscious, Indian exportes could be actively exploring it, they added.

The domestic market for cotton textiles exemplifies a similar situation with textile mills getting saddled with unsold stocks. "The situation has become so worse that the mills are forced to use the outside warehouses for storage of goods," says Nandan Damani president Mill owner's Association. Damani blames the growing market for powerlooms for the crisis. He says that the total production from the powerloom sector for the year 1997-98 is 20,303 million square metre which is far higher than the mills' production of 1657 million square metre. The trend is continuing in the current year, which makes the survival of mills difficult, he added.

Caught between Asian crisis and declining purchasing power, the garment sector is heading for trouble. Though the production has increased to $ 250.4 million during the period between January-June 1998 against $240.2 million for the same period last year, unit realisation hascome down.

The garment exports are adversely affected by the crisis in major non-quotas markets like Japan. Analysts said that the garment exportes should move way from the exports of traditional items like T-shirts and concentrate more on specialised items like children's garments and industrial garments.

Synthetic rayon & textile exports appear to be the silverlining in the dark scenario. With exports picking up by 12 per cent in the first six months of the current year, its long term prospects appear to be bright.

The going for the textile industry will be tough in the year ahead if the above facts are any indication. Industry observers say that there is no short term magic to end the crisis, preparing the ground for long-term survival will augur well for the industry.