Walmart, world’s largest retailer, is shifting its manufacturing base from China to India in order to utilize cheaper imports from the emerging Asia powerhouse. Walmart is not alone in its endeavor as other retailers such as Target, Amazon and Home Depot are also looking towards India to take advantage of the lower costs of imports.
In the face of the coronavirus pandemic, Walmart is looking to reduce its dependence on the Chinese market, which is under immense pressure from the US due to the strained diplomatic relations between the two countries. Walmart is hoping this move of shifting its manufacturing base to India, will be a boon in the long run.
One of the major reasons for Walmart’s shift to India is because of its competitive labor costs. Walmart sources nearly 80% of its goods from China and the labor cost of those same goods in India is significantly lower than China. Walmart is hoping to cut costs by manufacturing the same goods in India, thereby reducing its reliance on China for imports.
India is a prime spot for labor and manufacturing opportunities for Walmart, and it provides the company a better control over costs. In addition to cost savings, Walmart is hoping that the Indian market will help them meet the growing demand for e-commerce and digital goods. Walmart has already announced that it will be investing more in India to build its presence there.
Walmart’s shift to India is expected to have a ripple effect on the Indian economy, as it will create more manufacturing jobs and open up opportunities for local businesses. As Walmart looks to India to reduce its reliance on China, it is also likely benefiting from India’s strong economic growth and the government’s pro-business stance.
It remains to be seen how Walmart’s move to India will fare in the long run but it is an important step taken towards diversifying the company’s supply chain. For Walmart to succeed in the Indian market, it must ensure that it is able to deliver competitively priced goods to its customers and develop a strong presence there.