Shein’s comeback to the Indian market (with a partnership with Reliance Retail) is now set to come, albeit with strict data localization and local manufacturing requirements. In a new development, the Chinese fast-fashion platform has now been given strict limits to its control and data access in the Indian market. The same must now be surrendered to Reliance Retail (one of India’s largest conglomerates), which shall retain complete ownership of the domestic operations. This arrangement comes after Shein’s app was banned in India in 2020, along with more than 300 other Chinese-linked apps, due to national security concerns.
To recap, four years ago, Shein had been among the 300+ Chinese apps that had been booted from the Indian market in response to rising tensions with China, particularly after deadly border clashes. At that time, the Indian government cited concerns over national security and digital sovereignty as the primary reasons for the ban. Although Shein’s app was removed from Indian app stores, the sale of Shein-branded products was never completely prohibited, and they continued to be available on platforms such as Amazon.
In a nutshell, Reliance will have full ownership and control over Shein’s operations in India. As per the agreement, Shein will function solely as a technology partner (as per Piyush Goyal, India’s commerce minister) and provide production support and training to local manufacturers without holding any equity in the Indian operations. Under the agreement, Shein-branded products will be produced by local manufacturers, who will benefit from Shein’s expertise in production and global reach as well.
With the new development, all customer data, including personal and non-personal information collected from Indian users, must remain within the country. The China-based Shein will have no access to this data, and the company is required to comply with the new measures. In addition to this, the platform will be subject to security audits conducted by government-empaneled cyber security auditors, a standard which is not typically enforced on retail partnerships but is necessary in the context of Shein’s return to the domestic market.
Another aspect of the partnership is the localization of production. Shein-branded products will now be manufactured by Indian suppliers, creating a network of local manufacturers capable of meeting both domestic and international demand. This shift is expected to boost India’s textile manufacturing sector, which can create new job opportunities as well. As for Reliance, the conglomerate will leverage its existing retail infrastructure, and this development is likely to reduce the country’s dependence on Chinese manufacturing and increase its own capabilities. The Indian government has been steadily pushing to make the country an alternative manufacturing hub to China, as well as support domestic small and medium-sized enterprises (SMEs). In addition to this, India has set an ambitious goal to double its annual exports to $2 trillion by the end of the decade.
Shein, for its part, will provide training and support to over 25,000 local suppliers in order to ensure that India plays a major role in the company’s global supply chain. The company, in recent years, has been expanding its production bases in countries such as Turkey, Brazil, and now India.
