Walmart diversifies supply chain: India surges, China dependency shrinks

In a strategic move to cut costs and enhance supply chain resilience, Walmart, the world’s largest retailer, has substantially increased imports from India while decreasing reliance on Chinese sources, according to data revealed by Reuters. Figures from bill of lading data, shared by Import Yeti, indicate that a quarter of Walmart’s U.S. imports between January and August this year originated from India, a significant rise from the 2% reported in 2018. Conversely, imports from China dropped to 60%, down from 80% in the same period in 2018.

This shift underscores the impact of rising import costs from China and escalating geopolitical tensions between the U.S. and China. Andrea Albright, Walmart’s Executive Vice President of Sourcing, emphasized the need for supply chain resilience and diversity to navigate challenges ranging from natural disasters to raw material shortages.

Walmart clarified that while the bill of lading data offers a partial view, redundancy in sourcing does not necessarily indicate reduced reliance on specific markets. The company asserted its commitment to sourcing more manufacturing capacity, citing a growth-oriented approach.

India plays a pivotal role in Walmart’s strategy to build manufacturing capacity, with the company accelerating its presence in the country since acquiring a majority stake in Indian e-commerce firm Flipkart in 2018. Walmart aims to import $10 billion worth of goods from India annually by 2027, a target it is on track to achieve, currently importing around $3 billion annually.

Walmart’s imports from India encompass a diverse range of products, including toys, electronics, bicycles, pharmaceuticals, packaged food, dry grains, and pasta. The country’s growing workforce and technological advancements position it as an attractive alternative to China for low-cost, large-scale manufacturing.

Walmart, which began its sourcing operations in Bangalore in 2002, now employs over 100,000 people in India across various units, including Walmart Global Tech India, Flipkart Group, PhonePe, and sourcing operations. CEO Doug McMillon’s meeting with Indian Prime Minister Narendra Modi in May underscored Walmart’s commitment to supporting India’s manufacturing growth and creating opportunities in the country.

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