A rise in growth in the US and European Union (EU), coupled with a shift in Chinese policies which makes its goods costlier, will result in a jump in the country's exports to two of the biggest markets in the world, ratings agency Crisil said today.
"The share of US and EU in India's exports is likely to rise as incremental demand from these countries disproportionately benefits India's direct exports to them," it said.
The agency said that in the next three years till 2016, the World Bank expects United States and EU to add USD 2,030 billion to world output, which is three times more than what they have done over the past six years.
A shift in Chinese policies from exports to domestic consumption, which results in a rise in wages and incomes, and making the exports less competitive, will also help India, it said.
The agency said that from a high of around 49 per cent in 2000, the share of the EU and the US in the country's exports has slid to 29 per cent, as the share of Asian countries has grown from 37.8 per cent to 49.7 per cent.
Citing IMF estimates, it said the growth in Asian countries is expected to rise modestly, while in EU (which contracted by 0.1 per cent for the last six years) the economic growth is expected to rise 1.8 per cent.
The growth in US economy is also expected to accelerate to 2.8 per cent per annum over the next three years as against the average of 0.9 per cent post 2008, it said.
Crisil also asked for a push from the policy front for maximising the gains. It said the government should focus on sectors that contribute significantly to the exports and specifically in those where the share of the West is high.
This should include textiles, where the US and EU have a 34 per cent share, gems and jewellery (27 per cent), transport equipment (19 per cent) and machinery and instruments (30 per cent), Crisil said.