Walmart increases imports from India to benefit from cheaper imports
Bengaluru: Walmart is increasing its import of goods to the United States from India and decreasing its dependence on China in an effort to reduce expenses and broaden its supply chain, Reuters reported.
Reuters reported that figures from bill of lading data, provided by Import Yeti, reveal that the largest retailer globally shipped 25% of its U.S. imports from India between January and August this year, a notable rise from the 2% reported in 2018.
During the same period, only 60% of Walmart's shipments originated from China, a significant decline from the 80% reported in 2018, according to the same data.
It is interesting to note that despite this drop China remains the primary country from which Walmart imports goods.
The swing indicates how the shooting cost of importing from China and mounting political tensions between Washington and Beijing is encouraging big U.S. firms to source products more from countries including India, Thailand, and Vietnam.
According to the Reuters report, Andrea Albright, Walmart's executive vice president of sourcing said in an interview, "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 because we're constantly managing things from hurricanes and earthquakes to shortages in raw materials."
Walmart, however, said the bill of lading data presented only a partial picture of what it imports and that creating redundancy "does not necessarily mean" 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.
India has become a crucial element in Walmart's strategy to enhance its manufacturing capacity, as noted by Albright.
Walmart has been actively expanding its presence in India since 2018, marked by its acquisition of a 77% stake in the Indian e-commerce company Flipkart, the report said.
In 2020, the company pledged to import $10 billion worth of goods from India annually by 2027.
Albright indicated that Walmart is on course to achieve this target, currently importing approximately $3 billion worth of goods from India each year.
The Reuters report quoted Albright as saying that Walmart is bringing in a variety of goods from India to the U.S., from toys and electronics to bicycles and pharmaceuticals.
Food items like packaged food, dry grains, and pasta are also top imports from India.
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