Fast Fashion, Slow Progress? Shein-Reliance Deal Caught in Geopolitical Crossfire

The re-entry of Chinese fast-fashion behemoth Shein into India, in collaboration with Reliance Retail, has been the newest litmus test for the changing relationship between Asia's two biggest economies. Following a nearly five-year-long ban following border tensions, Shein's return in February 2025 was welcomed as a win-win: India would get jobs, manufacturing, and export opportunities, while Shein would access the world's fastest-growing fashion market.

 

Key Highlights:

 

The Shein-Reliance joint venture aimed to make India a large export and manufacturing center, bringing 25,000 Indian MSMEs into the global supply chain of Shein and increasing local employment and exports.

 

Rising trade tensions between the US and China have put a spanner in these plans. The US recently slapped a 145% tariff on Chinese products, and Beijing fears that companies will relocate their manufacturing to India. As a consequence, Chinese authorities are dissuading factories from going overseas, and Shein has been forced to rethink and perhaps reduce its India-sourcing goals.

 

The agreement is being renegotiated, with the initial vision of an Indian garment industry's huge export platform being held hostage. The two companies are said to be looking for ways around, but the outcome is far from clear.

 

The Indian government granted Shein's return only on a profit-sharing, brand-licensing model—no investment or access to data for Shein—representing continued strategic suspicion.

 

The destiny of such an alliance could determine the tone of future India-China business ventures, as both countries balance geopolitical competitions, economic interests, and the fluctuating sands of international commerce.

 

Source: Times of India, Economic Times, TradingView