NOVELTY - Producing (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine (III) or its salt involves: (a) resolving N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine (II) with optically active acid in organic solvent (S1) to obtain diasteromeric salts of desired (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine salt (III') and undesired (R)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine salt (IV'); (b) racemizing salt (IV') with acid in suitable solvent (S2) to form racemic N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine; and (c) resolving the hydroxypropanamine with optically active acid.    USE - For producing (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine, a key intermediate used in the preparation of (5)-N-methyl-3-(1-naphthalenyloxy)-3-(2-thienyl) propanamine (duloxetine) or its hydrochloride salt (claimed).    ADVANTAGE - The process is an improved and environment friendly process. Duloxetine selectively prevents the reuptake of serotonin (5-HT) and norepinephrine (NE) via transporter complexes on the pre-synaptic membrane, and increases the level of these neurotransmitters within the synaptic cleft. The process is a safe, environment and industrial friendly and commercially viable process for the production of duloxetine hydrochloride having low content of undesired R-isomer and chiral purity not less than 99%.    DETAILED DESCRIPTION - An improved process for producing (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine of formula (III) or its salt, a key intermediate used in the preparation of (5)-N-methyl-3-(1-naphthalenyloxy)-3-(2-thienyl) propanamine (duloxetine) of formula (I) or hydrochloride salt involves: either (a) resolving N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine (II) or its salt with an optically active acid in an organic solvent (S1) to obtain diasteromeric salt of desired (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine salt of formula (III') and diasteromeric salt of undesired (R)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine salt of formula (IV'); (b) racemizing the (R)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine or its salt with an acid in a suitable solvent (S2) to form racemic N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine; and (c) resolving the racemic N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine with an optically active acid to precipitate (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine (III) or its salt; or (b1) treating (R)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine or its salt with a coupling agent in a suitable solvent (S3) to form an isourea ether of formula (V); (c1) treating the resulting isourea ether (V) with the carboxylic acid in an aprotic solvent (S4) to obtain corresponding ester of formula (VI); and (d) hydrolyzing the ester (VI) in presence of a base using protic solvent (S5) followed by resolving the racemic N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine with an optically active acid to precipitate (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine (III) or its salt.    HA=optically active acid;    R1 and R2=alkyl, cycloalkyl, aralkyl or aryl (all optionally substituted);    R3=alkyl, cycloalkyl, aralkyl, aryl radical (all optionally substituted) or H;    R4=saturated or unsaturated aliphatic or cycloaliphatic hydrocarbon, or araliphatic or aromatic hydrocarbon (both optionally substituted) or H.    An INDEPENDENT CLAIM is included for an improved process for the preparation of (S)-N-methyl-3-(1-naphthalenyloxy)-3-(2-thienyl)propanamine (duloxetine hydrochloride) of formula (I) having low content of undesired R-isomer and chiral purity not less than 99%, involving: (a1) reacting the (S)-N,N-dimethyl-3-(2-thienyl)-3-hydroxypropanamine (III) or its salt, with 1-fluoronaphthalene in presence of a base and solvent (S6) at temperature of 35-55 degrees C to obtain (S)-N,N-dimethyl-3-(1-naphthalenyloxy)-3-(2-thienyl) propanamine (VII); (b2) treating the resultant (S)-N,N-dimethyl-3-(1-naphthalenyloxy)-3-(2-thienyl)propanamine (VII) with oxalic acid in an organic solvent to obtain (S)-N,N-dimethyl-3-(1-naphthalenyloxy)-3-(2-thienyl) propanamine oxalate salt (VIII); (c2) demethylating (S)-N,N-dimethyl-3-(1-naphthalenyloxy)-3-(2-thienyl)propanamine oxalate (VIII) using phenyl chloroformate in presence of a base followed by hydrolysis of the resultant carbamate compound using alkali metal hydoxide in presence of aromatic hydrocarbon to obtain duloxetine (I) in situ; (d1) converting the resulting duloxetine base to its hydrochloride salt; and (e) optionally purifying the crude duloxetine hydrochloride to obtain pure duloxetine hydrochloride.