"The lack of a proper marketing infrastruture will be the biggest impediment of the Indian industry even as the other factors are beyond its control," said secretary of Northern India Textile Mills Association (NITMA) KJS Ahluwalia, talking to The Financial Express.

Last fiscal, the textile exports saw a rise in export value realisation by a mere Rs 1.64 per kg. Economists in general feel that the rupee would further erode in the coming months with the slowdown in the reforms process that has already taken toll in the shape of delay in the implementation of several large projects in the areas of power generation, petroleum, roads and telecom.

This is poised to effect the macro-economic equilibriums and bring about further pitfalls.Including the foreign exchange earnings from the textile exports, which have risen by 14.45 per cent in the last fiscal to amount to Rs 44,298 crore from Rs 38,705 crore.

Exports of cotton textiles (mill-made, powerlooms and handlooms) also increased by 10 per cent to Rs 16,448.31 crore from Rs 14,971.98 crore in the last fiscal.

Cotton yarns exports registered a modest increase at 1.61 million kgs at 486.78 million kgs in quantity terms from the earlier amount of 485.17 million kgs. In value terms, it recorded an increase of Rs 99.4 crore at Rs 5,957.86 crore in the last fiscal against the earlier level of Rs 5,858.52 crore.

With this, NITMA has already asked the government to extend the exemption from the restrictions pertaining to the sourcing of domestic cotton to the EOUs and the EPCG units.

The association has called for the extension of the exemption with the domestic consumption of cotton going down. And, says the association, if the exemption is lifted, then the EOUs as well as the EPCG unitswould be compelled to import cotton well below the prescribed level of 40 counts.

The government had earlier eliminated the mandatory use of cotton for the EOU as well as EPCG units in the beginning of the current calender year and had extended it for the full calendar year to end by the last day of December.

The continuation of the restrictions was of no use in the long term interest of the Indian industry, as all the three items cotton, yarn and textiles were freely importable by the industry.

Moreover, it only added to the hurdles of the industry which was already facing an intense competition in the area from the mutlinationals.The industry was already in doldrums, Ahluwalia said and the removal of the extension was like the last straw to the ailing industry. In the event of the extension being not granted by the government, industry sources said that there would be a devastating effect on the exports of textiles in the this fiscal.