Shein to scale back global sourcing partnership with Reliance Retail

Fast-fashion giant Shein is renegotiating its global sourcing partnership with India's Reliance Retail and might significantly scale back the deal. This shift reportedly follows pressure from Beijing, discouraging Chinese companies from moving production overseas amid ongoing trade disputes, particularly concerning US tariffs.

Tariffs imposed during a previous US administration sparked concerns in China that manufacturers would relocate to avoid duties, potentially favoring countries like India. While companies like Apple have moved some production to India, major Chinese brands have largely kept manufacturing within China, even while producing locally for the Indian domestic market.

Although Shein is headquartered in Singapore, most of its manufacturing remains in China. Sources indicate Shein was eager to reduce this reliance and significantly increase sourcing from India.

Shein re-entered the Indian market in February 2025 through a standalone app developed and managed by Reliance Retail Ventures. This occurred nearly five years after a ban during heightened India-China border tensions. Aiming beyond retail, their partnership planned on creating an export platform for Indian small and medium-sized businesses (SMBs) involved inb apparel and textiles. Shein had committed technology and expertise to integrate around 25,000 SMBs, establishing a parallel global supply chain based in India – a plan now facing uncertainty.

India’s government previously confirmed the platform would be domestic, hosted on infrastructure that Shein could not access, nor would it have rights to the data. Shein and Reliance are reportedly trying to find solutions regarding the latest directive from Chinese authorities.

Despite these hurdles, Shein's 2024 global sales increased by 19 per cent to $38 billion, though net profit declined by nearlry 40 per cent to $1 billion, according to international news reports.

The potential scale-back contrasts with India's booming fast fashion market, which expanded by 30-40 per cent in FY2024 despite slow overall consumer spending and is projected to hit $50 billion in sales by 2030-31.