After being banned in mid-2020 due to national security concerns, Shein, the Chinese fashion giant, is making a carefully structured re-entry into the Indian market with stringent conditions to ensure full local control. The company will partner with Reliance Retail Ventures Limited, which will hold complete ownership and operational control over the platform, while Shein will function solely as a technology partner.
In a key announcement, Commerce Minister Piyush Goyal revealed the terms of the deal, which include several critical measures designed to address national security and data privacy concerns:
- Local Hosting: Shein’s platform will be hosted entirely on Indian infrastructure, ensuring all operations are grounded in the country.
- Data Sovereignty: All customer data—both personal and non-personal—will be kept within India. Shein will have no access to this data, a measure designed to safeguard user privacy.
- Security Oversight: Regular audits by government-approved cybersecurity experts will be conducted to ensure compliance with India’s stringent security norms.
This move is part of Shein’s strategic re-entry into India after its ban along with over 300 Chinese-linked apps, including TikTok, in 2020. The decision was part of India’s broader crackdown on Chinese apps amid rising national security concerns.
Reliance Takes Charge
Under the new arrangement, Reliance Retail, a subsidiary of India’s largest conglomerate Reliance Industries, will oversee Shein’s operations within the country. The agreement is aligned with India’s push for economic self-reliance and boosting domestic manufacturing. As part of the deal, local manufacturers will produce Shein-branded products for both the Indian and global markets, creating new opportunities for India’s textile industry.
The return of Shein could set a precedent for other Chinese companies seeking to re-enter India. By ensuring local control and oversight, this deal addresses the government’s security concerns while opening doors to international business collaboration.
A Precedent for Future Collaborations?
While China has criticized India’s actions as violations of WTO guidelines, this deal with Shein may pave the way for future partnerships between Indian firms and Chinese companies under similar stringent conditions. For Shein, the path to regaining a foothold in the Indian market is now clearer, provided the terms are rigorously followed.
