India is gradually benefiting from recent global changes in manufacturing, sourcing, and supply chains, while China is facing challenges.
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Over the past five years, various disruptions, including trade conflicts, the COVID-19 pandemic, Brexit, Ukraine war, assertive industrial policies etc have significantly altered the landscape of global manufacturing for export.
A recent study by Boston Consulting Group reveals that while US imports from China decreased by 10 per cent from 2018 to 2022, imports from India increased by 44 per cent.
For instance, US imports of mechanical machinery from China dropped by 28 per cent from 2018 to 2022, but increased by 70 per cent from India.
India has emerged as a winner in global manufacturing, with its exports to the US growing by $23 billion, a 44 per cent increase from 2018 to 2022, according to the report.
According to a report by Economic Times, Walmart, which is America’s biggest retailer, has been increasing its sourcing from India. This means that its stores in the US are selling more products with the Made-in-India tag.
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“Walmart aims to source across categories where India has expertise, including food, consumables, health and wellness, general merchandise, apparel, shoes, home textiles, and toys. It is on track to reach its target of sourcing $10-billion worth of goods from India each year by 2027,” the report quoted Andrea Albright, executive vice president, sourcing, at Walmart, as saying.
As per Walmart, already India is one of the top sourcing markets for the world’s largest retailer with annual exports worth about $3 billion. Made in India apparel, homeware, jewellery, hardlines and other popular products reach customers in 14 markets, including the US, Canada, Mexico, Central America and the United Kingdom via Walmart’s Global Sourcing office in Bengaluru, which opened in 2002.
India has a competitive edge in terms of direct manufacturing costs for export.
The average cost of Indian-made goods imported into the US is 15 per cent lower than domestically produced goods in the US.
According to ‘QIMA Sourcing Survey 2023: Disruption, Diversification, Digitization’, there has been a growing preference for sourcing from India among American businesses.
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The study by QIMA, a quality control and supply chain audits company, said after rising through the ranks of preferred procurement partners in the past few years, India maintains its high appeal as a supplier market.The survey further said India’s appeal as a sourcing partner goes far beyond textiles. Viewed by industry, India as a supplier market was the most popular among businesses working in the Accessories, Jewelry and Eyewear sector (where 45 per cent named it among their top three), followed by Promotional Products (44 per cent). The Textile and Apparel sector, traditionally viewed as India’s “bread and butter”, came in third at 40 per cent.
