Why Walmart plans to sell billions more in India-made goods

Change in plan.
Change in plan.
Image: REUTERS/Brian Snyder
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Walmart is trying to prove its loyalty to India.

The Bentonville-based retail major yesterday (Dec. 10) said it will triple its exports from India to $10 billion (Rs73,680 crore) a year by 2027. “By significantly accelerating our annual India exports in the coming years, we are supporting the Make in India initiative and helping more local businesses reach international customers while creating jobs and prosperity at home in India,” Doug McMillon, president and CEO of Walmart said in a press release.

The announcement comes at a time when the Narendra Modi government has been encouraging local and multinational companies to “make in India for the world.” The government has so far committed incentives worth up to Rs2 lakh crore for companies to set up factories in the country. New Delhi hopes this scheme will woo companies that may be looking to exit China amid rising tension between the eastern nation and the US.

Walmart’s commitment could also help it tackle criticism that India’s fast-growing e-commerce sector is now dominated by only American companies: Amazon and Walmart-owned Flipkart.

The two companies have time and again faced a backlash from small Indian businesses who claim that the American retail giants are using their muscle to create an unfair playing field.

Most recently, on Nov. 30, the Confederation of All India Traders (CAIT), an organisation of over 60 million small local businesses, wrote a letter to finance minister Nirmala Sitharaman alleging that banks in the country are indulging in “unethical practices” in collusion with Flipkart and Amazon by offering cash backs and incentives to shoppers who transact using specific credit or debit cards.

But in its press release announcing the new export target, Walmart highlighted how engaged the company already is with Indian suppliers.

Walmart India exports

Walmart has been sourcing goods from India for over two decades, and the country is one of its top sourcing markets.

The company exports India-made apparel, homeware, and jewellery, among other things to 14 markets, including the US, Canada, Mexico, Central America, and the UK, it said. The company runs its export operations in India from its Global Sourcing office in Bengaluru, which was set up in 2002. The company plans to further strengthen its supply chain ecosystem in India both by boosting its relationships with existing suppliers and expanding its supplier base.

“The expansion in sourcing will include helping develop hundreds of new suppliers in categories such as food, pharmaceuticals, consumables, health & wellness, and general merchandise, along with apparel, homeware, and other key Indian export categories,” the release said.

Walmart claims it works closely with its existing suppliers in India to help them upgrade their operations and meet international standards. ”Walmart brings global market intelligence and demand forecasts that help suppliers with strategic planning,” the company said.

Some of Walmart’s Indian suppliers include textiles maker Welspun, LT Foods (that makes basmati rice under the popular Daawat brand), cookware maker Aniket Metals, and processed fruits and vegetables exporter Global Green Company.

“Since we became a Walmart supplier in 1998, Welspun has grown to become the world’s largest home textiles manufacturer, exporting 94% of our output and employing 20,000 people, 25% of whom are women,” the Walmart press release quoted Dipali Goenka, CEO of Welspun India as saying.