The reassessment comes amid rising US-China trade tensions, prompting China to tighten control over domestic manufacturing and discourage overseas shifts
Fast fashion retailer Shein is reportedly reevaluating the extent of its sourcing partnership with Reliance Retail Ventures Ltd. (RRVL), according to a report by The Economic Times citing sources familiar with the situation.
The reassessment comes at a time of mounting trade frictions between the United States and China, which have prompted Chinese authorities to strengthen control over domestic manufacturing and deter companies from relocating operations overseas.
The Reliance-Shein alliance, which marked Shein’s return to India earlier this year, was initially framed as a strategic move to position India as a key export hub for the brand’s global supply network. However, recent developments—including a 145% import duty imposed by the U.S. on Chinese products—have prompted China to intensify efforts to retain domestic production capacity.
In response to Washington’s trade barriers, Beijing has introduced its own retaliatory tariff of 125% on US goods. While the US has temporarily suspended some tariffs—such as the 26% duty on Indian imports—for a 90-day period, China has not received the same relief. Amid these intensifying tensions, Shein’s plans to ramp up sourcing from India now appear uncertain.
The collaboration between Shein and Reliance, formalised as part of Shein’s India comeback nearly five years after the platform was banned during a crackdown on Chinese apps, had ambitious goals. These included launching a locally hosted Shein app via Reliance infrastructure and involving approximately 25,000 Indian MSMEs in a robust, export-oriented supply chain.
Shein had committed to providing Indian manufacturers with the tools and technology to integrate into its global production ecosystem. Now, with Beijing wary of losing its manufacturing dominance, those aspirations may need to be scaled back.
The uncertainty surrounding the Reliance-Shein tie-up also comes at a time when Shein is facing slowing growth and intensified competition in the global fast fashion market. The brand’s net profit dropped by nearly 40% to $1 billion in 2024, despite a 19% rise in annual revenue to $38 billion. Once valued at $100 billion in 2022, the company’s valuation fell to $66 billion the following year.
India remains a key market for Shein, especially as the country’s fast fashion sector is expected to grow from $10 billion in FY24 to $50 billion by FY31, according to estimates by Redseer Strategy Consultants.
Reliance and Shein have not issued any official statements regarding the renegotiation reports. However, according to The Economic Times, both companies are reportedly considering alternative approaches to preserve certain aspects of their sourcing deal amid evolving global supply chain dynamics.
