New Delhi, Aug. 26 -- India's textile sector is entering a stronger phase as improving domestic raw-material availability and greater sourcing flexibility are expected to support industry spreads, but the sustainability of the recovery will depend on how well higher cotton costs are passed through to yarn prices, according to a report by 360 ONE Capital.

"The textile operating environment has improved meaningfully, although the strength and sustainability of the recovery differ across the value chain," the report said, adding that the ability to pass higher cotton costs into yarn realisations remains the "key monitorable" for sustaining spreads.

The report said cotton spinning had one of its better quarters in the last 2-2.5 years, supp...