After a four-and-a-half-year ban, Shein, the Chinese fast-fashion giant, is making a comeback in India — a market it was abruptly shut out of in 2020 alongside more than 200 other Chinese apps. It is uncertain what has made the relaunch possible: a thawing of digital relations, or simply the passing of time in a digitally fractured and fast paced geopolitical environment?
Why it matters: Highlighting the value of the Indian market and in order to re-enter the country, Shein has committed to providing only the technical support needed for its operations in India, forgoing access to any subsequent market data gained from doing business there. Meanwhile, India is striving to build its manufacturing and R&D capabilities in textiles and apparel by establishing large-scale textile parks, offering production incentives for man-made fiber (MMF) apparel, MMF fabrics, and technical textile products, and providing export-oriented support. Shein’s re-entry into the country could further invigorate India’s textile industry.
Details: According to the Times of India, Shein’s initial re-entry into the Indian market will start with a backend test launch on Reliance’s fashion website, Ajio.com, focusing on casual western wear and other items. While the rollout could eventually expand to other Reliance platforms, no specific timeline has been announced. The move positions Shein, now based in Singapore, to compete with India’s established players like Tata’s Zudio and Flipkart’s Myntra in the affordable fast-fashion segment.
- Reliance Retail, the largest retailer in India in terms of revenue, entered into a long-term licensing agreement with Shein, where Shein will only provide technical support for its operations in India, and Reliance will pay a licensing fee for use of the brand. Under this agreement, Reliance will assume full control of Shein’s operations in India. Over the next few years, Reliance will independently build Shein’s supply chain in India, with all products sold through Shein India produced locally. Furthermore, any data generated by Shein’s Indian operations will be stored within the country, ensuring that Shein’s headquarters will have no access to Indian market data.
- Indian Commerce Minister Piyush Goyal confirmed that Shein’s retail platform in India will be hosted on domestic infrastructure to ensure data security and prevent Shein from accessing or controlling it. The Ministry of Textiles, after consulting with other relevant departments, has also approved Reliance Retail’s proposal.
Context: India’s push for data localization has been a cornerstone of its digital regulatory framework. In 2019, India’s data localisation norms and draft e-commerce policy aimed to restrict the transfer and storage of sensitive and critical data outside the country, a move that was heavily criticized by foreign governments and global tech companies as it potentially created barriers to digital trade. Indian officials, however, argued that data localization was vital for protecting national sovereignty, securing timely law enforcement access to data, promoting local business interests, and enhancing investment in cloud storage infrastructure.
- The Indian government’s policy on Chinese software, particularly its firm stance against Chinese apps, has been a direct result of geopolitical tensions. Since the onset of political tensions with China following the 2020 border conflict, India’s ban list has expanded from an initial 59 Chinese apps, including TikTok, to 321 apps.
- In July 2021, Shein attempted to re-enter the Indian market via Amazon but failed.
- In 2022, India introduced a draft data privacy bill that has spurred a shift in global digital diplomacy and reshaped the rules of the digital economy, allowing cross-border data flows with notified countries.
- Chinese home appliance manufacturer Hisense Group is also expanding its business in India by strengthening cooperation with local companies. On December 24, 2024, Hisense partnered with the service division of Reliance Retail, Reliance resQ, to elevate after-sales service nationwide.
