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Wal-Mart's suppliers shift base from China to India
23 May '05
4 min read
when the going gets tough, the chinese simply cross the wall. faced with a higher tax on exports following pressure from the us and the european union, large chinese textile suppliers to wal-mart are relocating their manufacturing base to india.
and the world's largest company seems to be loving it. the company says it “welcomes” the shift and plans to double sourcing from india.
incidentally, wal-mart buys goods from india worth $1bn — close to coke's total investments here in the past 13 years.
the chinese are not the only ones packing their bags. wal-mart suppliers in singapore and the middle-east have also shown interest to shift production to india. the removal of quotas seems to be helping india's case.
china is already under pressure from the us to revalue its currency which has been artificially kept low against the dollar. it also faces demands from the eu and the us to curb its surging textile exports. beijing has reacted to it by hiking the tax on exports. if the yuan is revalued, the combined effect of the changes will make chinese goods costlier.
vice-president and managing director of global procurement, wal-mart stores, andrew tsuei, told et in an exclusive interview that the removal of textile quotas has made india more competitive in apparel and textile production.
commenting on the expected shift by suppliers in favour of india, he said cheaper raw material and availability of trims allow indian companies to reduce production lead time, which is important to the retail industry.
and the world's largest company seems to be loving it. the company says it “welcomes” the shift and plans to double sourcing from india.
incidentally, wal-mart buys goods from india worth $1bn — close to coke's total investments here in the past 13 years.
the chinese are not the only ones packing their bags. wal-mart suppliers in singapore and the middle-east have also shown interest to shift production to india. the removal of quotas seems to be helping india's case.
china is already under pressure from the us to revalue its currency which has been artificially kept low against the dollar. it also faces demands from the eu and the us to curb its surging textile exports. beijing has reacted to it by hiking the tax on exports. if the yuan is revalued, the combined effect of the changes will make chinese goods costlier.
vice-president and managing director of global procurement, wal-mart stores, andrew tsuei, told et in an exclusive interview that the removal of textile quotas has made india more competitive in apparel and textile production.
commenting on the expected shift by suppliers in favour of india, he said cheaper raw material and availability of trims allow indian companies to reduce production lead time, which is important to the retail industry.
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