Going ‘All In’ for ‘Made in India’: What’s the Buzz Among American Consumers ?

Commodity Samachar
6 min readNov 17, 2023

Since we were kids, we’ve seen an astonishing amount of products and toys that have the tag “Made in China” and in the back of our minds, we’ve been thinking about the power that China holds over the world when it comes to production.

However, after a long road in economic resurgence, India has started replacing Made in China products on American Shelves with Made in India products.

So why has this occurred?

The Recent shifts in global manufacturing, sourcing and several supply chain establishments have led to India’s gradual gain at the expense of China.

Looking back at the past 5 years, several world-changing events have taken place such as trade wars, the covid 19 pandemic that caused devastation worldwide, natural disasters, severe supply restrictions, the War on Ukraine and assertive industrial policies that have significantly reshaped the global export manufacturing landscape. One of the main reasons is the covid 19 pandemic that emanated from China. They’ve been having somewhat of a hard time as investors have been pulling out of the country.

In a recent study that was conducted by the Boston Consulting Group the US imports from China decreased by 10% between 2018 and 2022 in inflation-adjusted terms wherein imports surged by 44% from India, about 18% from Mexico and also a whopping 65% from the Association of Southeast Asian Nations (ASEAN).

India’s Positioning in the Global Atmosphere:

When we analyse the data, from 2018 to 2022, the US imports of mechanical machinery from China decreased by 28 %, whereas it rose in counterparts such as Mexico — by 21 per cent, ASEAN by 61 % and surprisingly to 70% in India.

The past 5 years have been crucial for India, as it has positioned itself firmly as a frontrunner in the global manufacturing sector observing remarkable surges in India made items exports to the US.

As per the previously mentioned study, the amount has surged to $23 billion, thereby signifying a 44% increase from 2018 -2022. During the same tenure, China experienced a decline of 10% in exports to the US.

Walmart — A Big Supporter of ‘Made in India’ products?

The likes of Walmart, IKEA and many more establishments in the US have moved towards “ Made in India” products.

As per their observations, Indian made items or products are increasingly making a market on American shelves thereby enjoying high consumer visibility. They have further gone on to acknowledge that the largest retailer in America has notably amplified its sourcing from India, and in doing so has reflected an uptick in products that feature a “Made in India” label within its US-based stores.

Walmart’s strategy has gone on to sourcing food, consumable products, health and wellness, merchandise, shoes and apparel, textiles and toys. All of these products boast and display the expertise that India has on its “made in India” initiatives. In a recent scoop to ET, Andrea Albright, the Executive Vice president focusing on sourcing at Walmart, conveys that the retail giant is on a trajectory to achieve its objective of sourcing $10 billion worth of goods annually from India by the year 2027.

Currently, India boasts $3 billion in annual exports towards Walmart as per the company statements. Apparel, homeware, jewellery, and various popular Indian made items or products reach customers in 14 different markets. This has been achieved through Walmart’s global sourcing office in Bengaluru, established in 2002 and has expanded the distribution of ‘Made in India’ products towards the US, Canada, Mexico, Central America, and the United Kingdom as well.

Made in India — What’s the attractive element in “made in India” products?

India holds a significant appeal due to its strong advantage in direct manufacturing costs as an export entity. According to the BCG, the average cost of Indian made items or goods imported into the US and additionally factoring in factory wages adjusted for productivity, logistics, tariff and energy stands 15 per cent lower than the cost of producing the same goods within the US. In contrast to production in the US, the average cost from China is only 4 per cent lower than US costs and notably, it is 21 % higher for goods subject to US tariffs associated with the trade war.

A competitive labour-adjusted market also drove India towards this new sentiment. According to a report by the BCG, Both Mexico and India remain among the cost-competitive manufacturing sources globally, with Mexico identifying as the most competitive option for the US.

Made in India — India’s competitive advantage in global manufacturing:

India has made a name for itself after several years and has become the 5th largest economy in the world.

According to the QIMA sourcing survey 2023: Disruption, Diversifications, Digitization that had been conducted by QIMA specializes in quality control and supply chain audits, emphasizing the point that India has sustained a strong appeal as a supplier market after gaining recognition as a preferred procurement partner in the recent years.

In terms of individual countries, the primary leaders in their respective regions — India and Vietnam — hold equal importance as overseas sourcing partners for the West. More than a quarter of US and EU-based respondents named both India and Vietnam among the top three sourcing countries, highlighting their importance in global sourcing strategies.

Further, the survey emphasized that India’s attractiveness as a sourcing partner extends far beyond the textile industry. The report notes that while considering various industries, India is most popular among businesses engaging in accessory creations, jewellery and the eyewear sector as well. In addition, the pinnacle of India’s excellence, the Textile and Apparel sector has retained a lot of importance with 40 percent of respondents ranking India amongst their top 3 sourcing destinations.

A Note from Commodity Samachar:

On a long-term basis, as China’s influence diminishes amongst Western buyers, it is evident that the decreasing proportion of respondents naming China among their top 3 sourcing partnerships has decreased. As per a Qima survey, US-based companies naming China have hit a year low at 73 percent, while 85 per cent of EU-based respondents also displayed a reduced reliance on China in their sourcing strategies.

Procurement volumes mirrored this trend, with 61 per cent of US-based respondents and 58 percent of EU-based respondents reporting a decrease in buying from China in Q1 2023 compared to the previous year.

However, despite this trend, China maintains a pivotal role in global supply chains even as sourcing diversifies to other countries.

Our Head of Research, Ankit Kapoor had this to add to the statement.

“ India is a growing economy and these developments are a boon to the overall growth span of the nation. Even though “Made in India” products are being preferred by US retailers, there is quite a big difference between China’s exports and India’s. When Indian made items are being procured for billions, the USA’s relationship with China remains strong, and the procurement between these countries amounts to trillions in business. This competitive atmosphere may change but it will take quite a lot of time. However, without proper infrastructure for education or skill development in the country, the avenues to produce more exports and deals are minimalistic. Hence, we’ve got a long way to go”.

So will ‘Made in India’ change the tides of global consumerism or will ‘Made in China’ prevail in the end?

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Commodity Samachar

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