Walmart is planning to purchase toys, shoes, and bicycles from India to boost its exports to $10 billion by 2027. The US retailer is looking to develop new suppliers in various categories such as food, pharmaceuticals, consumables, health and wellness, apparel, and home textiles. This move highlights India’s growing strength in the toy industry, which was a net importer of toys until a few years ago. Walmart recently held a virtual meeting with various domestic toy manufacturers to inform them about their requirements and expected quality standards as they were directly involved with domestic toy makers.
Walmart’s commitment to Indian exports
In December 2020, Walmart committed to triple exports of goods from India to $10 billion every year by 2027, giving a significant boost to micro, small, and medium enterprises (MSMEs) in India. Walmart’s expansion includes helping to create hundreds of new suppliers in various categories such as food, pharmaceuticals, consumables, health and wellness, and general goods along with apparel, home goods, and other key Indian export segments.
Walmart’s CEO, Doug McMillon, reaffirmed Walmart’s commitment to Indian suppliers during his visit to India, saying India’s unique ecosystem of suppliers would help the company achieve its goal of exporting $10 billion worth of goods from the country by 2027. He also met with Indian Prime Minister Narendra Modi to discuss logistics, capacity building, and supply chains and their efforts to support India’s manufacturing growth and create opportunity.
Efforts to promote domestic toy manufacturing
The Department of Industries and Domestic Trade Development (DPIIT) in India is taking several steps to promote domestic manufacturing of toys and help Indian manufacturers comply with necessary norms and tie up with global players to increase exports. Manu Gupta, promoter of Playgro Toys India, and president of the Toy Association of India, stated that the US-based retailer has approached the industry to buy toys in three main categories, including ride-on and outdoor toys and mechanical toys worth $400 million.
The country’s toy exports during April-December 2022-23 totaled Rs 1,017 crore. Exporters in 2021-22 reached Rs 2,601 crore while imports are down 70% to Rs 870 crore. The government increased the import duty on toys from 20% to 60% in February 2020, and now it has increased to 70% this year to encourage imports. The government is also considering a financial incentive scheme – PLI (Production Linked Incentive) for toys, and in 2020, they issued the Toys (Quality Control) Ordinance to ensure that toys conform to Indian standards and bear the standard stamp under the license.
Conclusion
Walmart’s move to source Indian toys, shoes, and bicycles emphasizes India’s growing strength in the toy industry and other categories where Walmart plans to expand its business, such as food, pharmaceuticals, health and wellness, and consumer goods. Despite various challenges faced by Indian toy manufacturers due to compliance norms and import duties, India’s efforts to promote domestic manufacturing by implementing new schemes and quality control checks will benefit Walmart’s goal to triple its exports to $10 billion by 2027.
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