Global retailers sourcing products from India and China might have to rework their strategy as low cost sourcing is unlikely to last long. The recently released Deloitte 2007 Global Powers of Retailing study, reports that the combination of political and economic factors will soon increase the cost and reduce the access to imports heading to the US, Japan and Europe, forcing retailers to look for domestic sources which will be at higher prices.
The report adds that “China, Mexico, Brazil, India and even Vietnam are places that run large trade surpluses with the rest of the world that in the aggregate are no longer sustainable.” Sudhir Dhingra, MD of Orient Craft, one of India's largest suppliers of apparel to The Gap and Banana Republic, says that “India has barely scratched the surface. It is China which has run a huge trade surplus, driving corporations to spread their sourcing across the world. India continues to enjoy the preferred destination status.”
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