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

No FDI, only tech transfer by Chinese fast-fashion retailer

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

According to the agreement, RRVL will own and operate a separate domestic app – SheinIndia.in – for Indian consumers, which will be walled off from the global app, government officials said on Friday.

They further said there won’t be foreign direct investment (FDI) in the country in this connection since there will be no equity investment by SHEIN in the Indian company and the operations will be run by a company 100 per cent owned by Reliance Retail. Any payment to SHEIN will only be made through profits of the Indian company and there will be “no fixed payment” committed to the fashion retailer.

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

The official further said that the ownership and control of the platform will remain with RRVL’s subsidiary – “a 100 per cent Indian company”. The platform and servers will be hosted, exclusively within India, and there will be no customer data transfer outside India. Apart from that the fashion retailer will not have any access to, or rights over, such data.

“Localisation of infrastructure and platform data are aimed to ensure that the collaboration with SHEIN will always be compliant with applicable Indian laws and strategic interest of the country,” the official cited above said.

SHEIN, operated by Roadget Business, is a popular international fashion retailer that operates across 125 countries. It has annual revenue of over Rs 2 trillion. Three years ago, the government banned its app in India citing security concerns.

At the moment, as much as 93 per cent of SHEIN’s sourcing is from China. Through this agreement, SHEIN will provide technology and expertise to RRVL to integrate a network of over 25,000 small businesses. This will also get textiles into the global supply chain.

This means that the partnership will also create a domestic vendor and supplier ecosystem that will cater to the demand for SHEIN -branded products from India in the Indian, as well as the global market.

“This will create a potential export opportunity of approximately Rs 50,000 crore from India. Even if only 25 per cent of the existing global demand of Shein is sourced from India, there is an opportunity of $7-8 billion,” the official said.