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Wal-Mart's suppliers shift base from China to India

23 May '05

4 min read

suppliers and buyers also evaluate infrastructure development, port security, political stability, labour and technology — areas where india is strong compared to other exporting nations. retailers also like to source from a number of different countries to reduce risk.

“as india is becoming more competitive, our suppliers are relocating to india and other countries in the indian sub-continent. wal-mart welcomes this shift as we hope to see our indian suppliers improve their efficiency as they increase the scale of their operations. we hope to see gains in improved delivery times and cost, which in turn, improves the in-stock levels in our stores and the prices we can offer our customers,” said mr andrew.

on the debate over revaluation of yuan, he said, “this is a hard question to answer as the impact, if there is any at all, will depend on the level of appreciation of the yuan, how fast it takes place, and how the chinese government manages any change. we don't have a clear answer because of all the various factors involved with exchange rates,” he said.

“what we do know is that higher prices will tend to make chinese goods less competitive in the global marketplace, and this could encourage manufacturers to move production to other markets. in the past 30 years, we have seen this happen as manufacturing costs increased in countries like japan, korea, taiwan and hong kong. global trade is a highly-competitive and mobile business, and iiwan and hong kong. global trade is a highly-competitive and mobile business, and india is in a good position to compete,” said the wal-mart official. wal-mart buys goods worth $12bn (rs 54,000 crore) from china and any impact on the chinese currency will have significant implications for the retail giant.

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