Walmart, the world’s largest company, is importing more goods from India to the United States and reducing its dependence on China.
From January to August this year, Walmart shipped 25% of its U.S. imports from India. This compares to just 2% in 2018. His data company, Import Yeti, shared this information with Reuters.
The same data shows that just 60% of Walmart’s imports during the same period came from China, down from 80% in 2018. China remains Walmart’s largest importer of goods.
of shift It shows how rising costs of imports from China and rising tensions between China and the United States are pushing American companies to import from other countries. These countries include India, Thailand, and Vietnam.
Andrea Alright is Walmart’s Vice President of Procurement. She said, “We want the best price.” He added that Walmart has to deal with everything from natural disasters to material shortages and cannot rely on any one supplier or region for its products.
Walmart said the import information does not mean it is reducing its dependence on its own market. “We are a growing company, sauce further manufacturing capacity” the company said in a statement. And Albright added that India has become a key part of Walmart’s efforts to build manufacturing capacity.
Walmart has been growing in India since 2018, acquiring a 77 percent stake in online company Flipkart. Two years later, the company pledged to import $10 billion worth of goods annually from India by 2027. Albright said this goal is on track to be achieved. Currently, it imports approximately $3 billion worth of goods from India every year.
Indian workforce and technology
Walmart imports products such as toys, electronics, sporting goods and medicine from India. Albright told Reuters that foods such as processed foods, dried grains and pasta are also popular imports from India.
India, whose stock market has soared to record highs this year, is seen as the country most capable of surpassing China in low-cost, high-volume manufacturing.
The South Asian country also has a growing workforce and technological development. However, China recently reported its first population decline in 60 years.
Walmart started its procurement operations in 2002 in the city of Bangalore, India. Currently, the company employs more than 100,000 employees, including temporary employees, across the country.
Cost increases from China
Supply chain experts say the rising cost of buying goods from China is also spurring the shift to India.
Chris Rogers is a researcher in Panjiva, S&P Global Market Intelligence’s supply chain research group. “Rising labor costs are making sourcing from mainland China less competitive,” he said. versus other manufacturing centers. ”
The minimum wage in China ranges from $198.52 to $376.08 per month. On the other hand, the average wage for unskilled and semi-skilled workers in India is between $108.04 and $180.06.
The COVID-19 pandemic has exposed the fragility of global supply chains and shown U.S. importers to be overly reliant on a small number of markets.
Albright said planning for an event like a pandemic is similar to planning for a natural disaster. She said: “What I can control is where my products come from and how I can make sure I get Christmas even if something happens in the supply chain.”
I’m Katie Weaver.
Julie Steenhuisen reported this story for Reuters. Gregory Stachel adapted it for VOA Learning English.
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words of this story
supply chain – n.A network of companies that supply materials and parts needed to provide products and goods to people
shift – v. move or move (something or someone) to another place or position
sauce – v.get something from a specific location
capacity – n.the amount of something that can be produced or controlled by a factory or company
draw – n.someone or something that causes many people to come to a place
versus – preparation.used to indicate two different things or options that are being compared or considered