Upbeat on the prospects of India's foreign trade contributing majorly to the economy, the Economic Survey on Wednesday cautioned against the negative impact of hardening of global oil prices and volatility among major currencies on country's exports.

"The expected robust pick up in the global trade is likely to contribute to overall growth of Indian economy. However, significant downside risks to this growth persists," the Survey tabled in the Parliament said.

Economic Survey 2003-2004: Complete Coverage

Noting that India was already being seen as a new hub for export of auto parts and other engineering goods, it said opportunities are expected to open in the textile sector after the phasing out of the Agreement on Textiles and Clothing next year.

The Survey, however, stressed on designing specific micro strategies for export growth to put it on a higher and sustainable growth trajectory.

It emphasised on further intensifying and sustaining efforts to strengthen services sector to promote services exports.

Pointing that the external sector had strengthened over the years with fragility of balance of payments no longer being a policy concern, the Survey said the large capital inflows in 2003-04 had resulted in further accumulation of reserves, providing an opportunity towards deepening of trade reforms and other administrative reforms.