Shein, China's fast-fashion behemoth, is poised to enter the Indian market again under strict conditions of data localization and operation. Commerce Minister Piyush Goyal said Shein will only return when it has partnered with Reliance Retail. The latter will maintain control over its operations and data.

The move comes after Shein's app was banned in 2020 due to national security and data privacy concerns. Shein has agreed to let go of control over its local platform and ensure that all data collected from Indian users remains within the country to meet the requirements of the Indian government.

 What are the conditions for Shein's re-entry?

In a parliamentary response, Minister Piyush Goyal outlined the details of the agreement between Reliance Retail Ventures Ltd (RRVL) and Shein.

Shein will only act as a technology provider under this partnership, while Reliance Retail's wholly-owned subsidiary, Reliance Retail Ltd (RRL), will maintain full ownership of the platform.

“The licence agreement covered the protection that ownership and control of the platform will always remain with RRVL through its wholly-owned subsidiary,” Goyal stated.

He further clarified, “As per the agreement, at all times, the platform will be hosted on infrastructure in India and all platform data will remain in India with Shein having no access to, or rights over, such data.”

The deal also provides for adherence by all parties to the laws of India with scope for impanelled audits by government agencies for ensuring cyber security infrastructure.

Indian manufacturing and jobs boost

As part of the deal, the platform will leverage a network of local manufacturers and suppliers to produce Shein-branded products. These products will not only be sold within India but also in global markets, creating opportunities for Indian manufacturers.

“It is expected that this will help in the growth of the Indian textiles manufacturing sector, including local handicraft and create significant employment,” Goyal noted.

Why was Shein banned in 2020?

Shein was one of several other Chinese apps banned in India due to data privacy concerns in addition to national security reasons back in 2020. That move came after escalating India-China tensions.

Although the app is still banned, Shein-branded products are available through third-party platforms like Amazon. Still, this new agreement sets a structured return for Shein under strict supervision.

How will Reliance and Shein work together?

The partnership ensures that Reliance Retail will operate the platform, while Shein will only provide the technology. Infrastructure hosting, data storage, and security will remain within India, with no access granted to Shein.

Goyal clarified that Shein-branded products were never banned but the app was restricted. The new model is designed to address past concerns while opening up opportunities for India's textiles and retail sectors.

Shein's return points out the government's cautious posture towards foreign businesses in fields dealing with sensitive data. Given the leadership of Reliance Retail and the stringent localisation requirements, the collaboration does look to balance economic opportunism with national security needs.

The re-entry of Shein also signals a potential boost for local manufacturing, while addressing the growing demand for affordable fashion in the Indian market.