Chinese fast-fashion retailer SHEIN 100% Indian on return, says Centre

SHEIN’s return in India will be through a licensing agreement with Reliance Retail Ventures (RRVL), which will primarily enable technology transfer by the Chinese online fast-fashion retailer.

As per the agreement, RRVL will own and operate a separate local app — — for Indian consumers, which will be isolated from the global app, government officials said Friday.

They further said that there would be no foreign direct investment (FDI) in the country in this regard as there would be no equity investment by SHEIN in the Indian company and the operations would be run by a company 100% owned by Reliance Retail. Any payment to SHEIN will be made solely through the company’s Indian earnings and there will be no “fixed payment” commitment to the fashion retailer.

“Under the agreement, SHEIN has agreed to license its technology and brands to be used by RRVL and also to develop a local retail e-commerce platform for Indian consumers to avail SHEIN-branded products,” said one of the aforementioned officials.

The official also said that ownership and control of the platform would remain with RRVL subsidiary RRVL – a “100 percent Indian company”. The platform and servers will be hosted, exclusively within India, and there will be no transmission of customer data outside India. Apart from that, the fashion seller will not have any access to this data or any rights over it.

“The localization of infrastructure and platform data is aimed at ensuring that cooperation with SHEIN is always in line with applicable Indian laws and the strategic interests of the country,” said the aforementioned official.

SHEIN, operated by the Roadget Business, is a world famous fashion retailer with operations in 125 countries. It has an annual revenue of over 2 trillion rupees. Three years ago, the government banned its app in India citing security concerns.

Currently, up to 93 percent of SHEIN sources come from China. Through this agreement, SHEIN will provide technology and expertise to RRVL to integrate a network of more than 25,000 small businesses. This will also bring textiles into the global supply chain.

This means that the partnership will also create a locally sourced and supplier ecosystem that will cater to the demand for Shein branded products from India in India, as well as the global market.

“This will create a potential export opportunity of around INR 50,000 crore. Even if only 25 percent of the current global demand for Shein is sourced from India, there is a $7-8 billion opportunity,” the official said.