Walmart is importing more goods to the United States from India to cut costs and reduce its reliance upon China amid escalating trade tension between Washington and Beijing. The world’s largest retailer shipped one-quarter of its U.S. imports from India between January and August this year, according to bill of lading figures shared with Reuters by data firm Import Yeti. That compared with just 2% in 2018.
The company says it has been working to increase its sourcing from India since last year and is seeking new partnerships for products such as toys, shoes, and bicycles. It also plans to boost its sourcing from India in categories including food, pharmaceuticals and consumables, health and wellness, apparel, and home textiles.
Walmart CEO Doug McMillon, who is visiting Delhi, Mumbai, and Bengaluru to meet suppliers, partners, and small and medium enterprises, said that India’s unique ecosystem of businesses will help the company meet its goal of exporting $10 billion worth of goods from the country each year by 2027.
He added that the company has seen a strong response from customers in the U.S. to the selection of Indian-made items available through its Walmart Marketplace platform. Walmart Marketplace is a curated seller community serving more than 120 million U.S. shoppers monthly. The retailer is bolstering its grassroots supplier development program, Vriddhi, to support the growth of underserved artisans and suppliers by providing them with a variety of online tools that can make it easier for them to use the Walmart platform, including administrative services such as registering and listing their products. The company is also partnering with Flipkart Samarth, a marketplace that allows smaller sellers to sell directly to consumers in the U.S.
McMillon also cited the growing popularity of the “Make in India” initiative launched by Prime Minister Narendra Modi. He said it is an opportunity for the country to showcase its capability to the rest of the world. He added that Walmart is committed to helping local businesses develop the skills and expertise to export their products to international markets.
The move comes when millions of mom-and-pop stores in India are worried that they could be shut out of business by American retail giants like Amazon and Walmart-owned Flipkart. They have been protesting against the $16 billion deal to take over the country’s biggest e-commerce company, arguing that the U.S. retailers will drive down prices, making them unprofitable.
Ajay Bajaj, a New Delhi shopkeeper selling appliances for more than five decades, says that his family’s shop could be forced out of business by the arrival of Amazon and Flipkart. He says he is not opposed to e-commerce but worries that the giants will make their products cheaper than him and force them out of business. He has written a letter to the finance ministry claiming that banks are colluding with American companies by offering incentives like cash backs on purchases made using certain credit cards.