India's external sector prospects look bright: Economic Survey

New Delhi: The prospects of the country's external sector look bright in the coming years as global trade is expected to increase, although rise in oil prices could create problems, the Economic Survey said on Monday.

The survey for 2017-18 was tabled in Parliament on Monday by Finance Minister Arun Jaitley.

"The prospects for India's external sector in this and coming year look bright with world trade projected to grow at 4.2 per cent and 4 per cent in 2017 and 2018 respectively from 2.4 per cent in 2016; trade of major partner countries improving and above all India's export growth also picking up," it said.

It added however that the downside risks lie in the rise in oil prices. But, it said, this could also lead to higher inflow of remittances which have started picking up.

"The supportive policies like GST (Goods and Services Tax), logistics and trade facilitation policies of the government could help further," the survey said.

The country's merchandise exports during the April- December period of 2017-18 grew by 12 per cent to USD 223.51 billion as against USD 199.46 billion in the year-ago period.

Imports during the 9-month period of the current fiscal rose by 21.76 per cent to USD 338.36 billion, leaving a trade deficit of USD 114.85 billion.

The Survey further stated that for the "first time in India's history", data on the international exports of states has been dwelt upon in the Economic Survey.

Such data indicates a strong correlation between export performance and states' standard of living.

"States that export internationally and trade with other states were found to be richer. Such correlation is stronger between prosperity and international trade," it added.

It has pointed out that five states - Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana account for 70 per cent of the country's exports.

Talking about services exports, it stated that although world trade volume of goods and services is projected to accelerate this year, "enhanced global uncertainty, protectionism and stricter migration rules would be key factors in shaping India's services exports".

India remained the eighth largest exporter in commercial services in the world in 2016 with share of 3.4 per cent. On the other hand, merchandise exports accounts for only 1.7 per cent of global shipments.