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Hi shivanangel,
OSG has a bug(feature?) that causes instanced objects to display the same material across all instances of an object, no matter what materials they have had on before. The problem you are getting with XRefs may be tied to the same issue. Currently the only way to handle that issue is to convert anything instanced to unique objects, export, then revert back to the original version. A similar approach should work in your case. I'll let you know if I come across anything better.
-Michael
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