15.14        ndian     onom
     is for corporations to enter currency swaps to re-           16, by 1.3 per cent and 15.5 per cent
     denominate asset and liability in the same currency          respectively.
     to create natural hedge. Unfortunately, too many             India’s export growth continued to be
     Indian corporations with little foreign currency             negative in the first half of 2016-17 at
     earnings leave foreign currency borrowings                   -1.3 per cent. However, in the second
     unhedged, so as to profit from low international             half of 2016-17 (recovering by 5.2 per
     interest rates. This is a dangerous gamble for               cent). In 2017-18 (April-December)
     reasons described above and should be avoided.               export growth picked up further to 12.1
                                                                  per cent.
        inDia’s external Performance                              India’s trade deficit (on custom basis)
                                                                  which had registered continuous decline
     India’s external sector has a mixed performance
                                                                  since 2014-15, widened to US$ 74.5
     in the fiscal 2017-18 (April-September). Major
                                                                  billion (from US$ 43.4 billion in 2016-
     trends in it are being briefly discussed below18:
                                                                  17). In 2017-18 (April-December) trade
     trADe scenArio                                               deficit (on customs basis) shot up by 46.4
                                                                  per cent to US$ 114.9 billion with POL
     India’s export growth (non-fuel) which has                   deficit growing by 27.4 per cent and non-
     generally been higher than world export growth               POL deficit by 65.0 per cent.
     (non-fuel) moved to negative territory in 2014
     and was lower or in tandem with world export        trADing PArtners
     growth (non-fuel) since then. Other BRICS
                                                         India’s trade with its major trading partners has
     countries also show similar trends. India’s exports
                                                         been going through a process of restructuring
     since August 2017 again picked up and increased
                                                         in recent years. Major features related to this are
     sharply in November 2017 in tandem with the
                                                         given below:
     sharp increase in export value growth. However,
     in December the growth rate of export volume and             Among India’s trading partners, the
     value index decelerated. Non-oil export volume               top five countries with which India has
     index followed a similar trend. Major features               negative bilateral trade balance are China,
                                                                  Switzerland, Saudi Arabia, Iraq and South
     have been as given below:
                                                                  Korea while the top five countries with
              India’s merchandise imports grew by 22.1
                                                                  which it has surplus trade balance are
              per cent against 11.3 per cent increase in
                                                                  USA, UAE, Bangladesh, Nepal and UK.
              its exports. Higher import growth owed
                                                                  India has the highest trade deficit with
              to POL (Petroleum, Oli and Lubricants)
                                                                  China. Its share in India’s total trade
              import growth at 17.8 per cent and gold
                                                                  deficit increased from 20.3 per cent in
              and silver import growth.
                                                                  2012-13 to 47.1 per cent in 2016-17 and
              India’s merchandise exports reached the             43.2 per cent in 2017-18. India’s major
              level of US$ 314.4 billion in 2013-14.              items of imports from China are telephone
              Following the global trend of decline               sets including mobiles, automatic data
              in export growth, India’s exports also              processing machines, diodes and other
              declined during 2014-15 and 2015-                   semi-conductor        devices,    electronic
       18.  Economic Survey 2017-18, Vol. 2, Ministry of          devices, chemical fertilisers, etc. India’s
            Finance, GoI, N. Delhi, pp. 82-88.                    major items of exports to China are