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Walmart shifts to India, cuts China imports

Walmart

According to Reuters, Walmart is importing more goods from India and reducing its reliance on China in order to cut costs and diversify its supply chain.

According to bill of lading figures shared with Reuters by data firm Import Yeti, the world’s largest retailer shipped one-quarter of its US imports from India between January and August of this year. This compares to only 2% in 2018.

According to the data, China accounted for 60% of its shipments during the same period, down from 80% in 2018. To be sure, China remains Walmart’s largest importing country.

The shift demonstrates how rising import costs from China, as well as escalating political tensions between Washington and Beijing, are encouraging large US corporations to import more from countries such as India, Thailand, and Vietnam.

In the United States, consumers face higher interest rates and higher food prices, eroding household savings and prompting Walmart and other retailers to be cautious about consumer spending.

Walmart said in a statement that the bill of lading data only provided a partial picture of what it sourced and that creating redundancy “does not necessarily mean” that it was reducing reliance on any of its sourcing markets. “We’re a growth business and are working to source more manufacturing capacity,” Walmart said in a statement.

Walmart

According to Albright, India has emerged as a critical component of Walmart’s efforts to increase manufacturing capacity.

Since 2018, when it acquired a 77% stake in Indian e-commerce firm Flipkart, Walmart has been accelerating its growth in India. It committed two years later to importing $10 billion in goods from India each year by 2027. Albright stated that the company is still on track to meet that goal. It is currently importing approximately $3 billion in goods.

Amazon rival Walmart announced this month that it plans to export $20 billion in merchandise from India by 2025.

One company that has benefited is Freewill Sports, a small Indian supplier of soccer balls, according to Chief Executive Rajesh Kharabanda in an interview.

According to supply chain experts, the rising cost of shipping goods from China has also contributed to the shift to India.

“Sourcing from mainland China has become less competitive because of rising labor costs versus other manufacturing centers,” said Chris Rogers, research analyst at S&P Global Market Intelligence’s supply chain analysis group Panjiva.

According to Albright, Pakistan and Bangladesh have benefited from Walmart’s strategy by expanding as suppliers of home and apparel products.

According to US import data, at least eight Freewill shipments sailed to Walmart warehouses last year from Mundra Port in Gujarat, India’s largest private port.

“There is a newfound confidence in the Indian manufacturing industry, as well as the availability of factory infrastructure,” said Rajesh Kharabanda, CEO of Freewill.

The Indian central bank expects the country’s economy to grow 6.5% this fiscal year. This year, China is expected to grow at a rate of around 5%.