One of the world’s largest retailers, Walmart, is dramatically expanding its imports from India while decreasing its reliance on China in a planned drive to reduce costs and improve supply chain resilience, according to data from Import Yeti shared with Reuters, as reported by the news agency on Wednesday.
This change demonstrates how big American corporations are purchasing more from India, Thailand, and Vietnam as a result of growing import costs from China and growing political tensions between Washington and Beijing.
According to the report, China accounted for just 60% of its shipments in the same time frame, compared to 80% in 2018. Indeed, China continues to be Walmart’s top import destination.
Due to rising interest rates and rising food costs, American consumers are seeing a decline in their household savings, which has caused Walmart and other retailers to downgrade their forecasts for consumer spending.
Andrea Albright, Walmart’s Executive Vice President of Sourcing, said in a statement, “We want the best prices. That means I need resiliency in our supply chains. I can’t be reliant on any one supplier or geography for my product.”
She further highlighted the necessity of supply chain resilience, citing the mounting political tensions between Beijing and the United States and the rising cost of buying from China.
But Walmart made it clear that the bill of lading data only gives a limited picture of its sourcing operations and that building redundancies does not always mean becoming less dependent on a particular market. Nevertheless, the business recognized that India’s rise to prominence was crucial to its attempts to diversify its manufacturing base.
Reportedly, Albright further stated that, “Since acquiring a 77% stake in Indian e-commerce platform Flipkart in 2018, Walmart has accelerated its growth in the country. The retailer committed to importing $10 billion worth of goods from India annually by 2027, and it remains on track to achieve this target.”
Prior to this, Walmart CEO Doug McMillon emphasized the company’s dedication to fostering India’s manufacturing growth during a meeting with Indian Prime Minister Narendra Modi in May.
In 2002, Walmart began conducting its sourcing activities in Bangalore. With multiple offices under its Walmart Global Tech India unit, Flipkart Group, PhonePe, and sourcing operations, the corporation currently employs over 100,000 individuals in the nation, including temporary labor.