In a strategic move to cut costs and diversify its supply chain, Walmart, the world’s largest retailer, has significantly increased its imports from India, reducing its reliance on China, according to exclusive data obtained by Reuters.
Data from bill of lading figures, shared by data firm Import Yeti, reveals that Walmart shipped a quarter of its U.S. imports from India between January and August this year. This marks a substantial increase from just 2 per cent in 2018. In contrast, shipments from China accounted for 60 per cent during the same period, down from 80 per cent in 2018. Despite the shift, China remains Walmart’s primary country for importing goods.
The move highlights the impact of rising import costs from China and heightened political tensions between Washington and Beijing, prompting major US corporations to diversify their sourcing to countries such as India, Thailand, and Vietnam.
Andrea Albright, Walmart’s Executive Vice President of Sourcing, emphasised the importance of securing the best prices and building resilience in supply chains. She stated, “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 clarified in a statement that while the bill of lading data provides a partial picture, creating redundancy does not necessarily indicate a reduction in reliance on any specific sourcing market. The company expressed its commitment to growth and efforts to source more manufacturing capacity.
India has emerged as a crucial component in Walmart’s strategy to enhance manufacturing capacity, with the retailer intensifying its presence since acquiring a 77 per cent stake in Indian e-commerce firm Flipkart in 2018. Walmart aims to import USD 10 billion worth of goods from India annually by 2027, a target it remains on track to achieve, currently importing around USD 3 billion annually.
Walmart’s imports from India encompass a wide range of products, including toys, electronics, bicycles, pharmaceuticals, packaged food, dry grains, and pasta. The country’s growing workforce and technological advancements make it an attractive alternative to China for low-cost, large-scale manufacturing.
Walmart initiated its sourcing operations in Bangalore in 2002 and now employs over 100,000 people, including temporary workers, across various offices under its Walmart Global Tech India unit, Flipkart Group, PhonePe, and sourcing operations. Walmart CEO Doug McMillon’s recent meeting with Indian Prime Minister Narendra Modi further underscores the retailer’s commitment to its strategic initiatives in the region, which Modi described as “fruitful.”
