Fast fashion company Shein is reportedly rethinking parts of its sourcing partnership with Reliance Retail, according to reports. This comes as trade tensions between the US and China continue to rise. China is tightening its control over local factories, making it harder for companies to shift manufacturing out of the country.
The original plan between Shein and Reliance was to make India a key global sourcing hub for Shein. However, after the US government introduced a 145% tariff on Chinese goods, China responded by discouraging factories from moving abroad. In turn, Shein may scale back its production plans in India. While the US paused tariffs on Indian goods for 90 days, this relief doesn’t apply to China. China has responded with a 125% tariff on American products, keeping tensions high.
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Shein made a comeback in India recently through a partnership with Reliance Retail after being banned in 2020 due to its Chinese ties. The deal allowed Shein to launch a dedicated app hosted by Reliance, with all Indian user data stored locally. The 2 companies also had plans to set up a large export hub involving 25,000 Indian MSMEs (small and medium manufacturers). Shein had promised to provide tech and support to help Indian factories join its global supply network. However, these plans are now uncertain due to the changing trade environment.
Even though global companies are looking to move manufacturing out of China, many Chinese tech brands like Oppo, Vivo, and Realme still make their products for India within China. Shein, while now based in Singapore, still relies mostly on Chinese factories. It hoped India would help reduce this reliance, but that may not happen soon, given the current geopolitical situation.
Shein is also facing challenges in the market. Its profit fell by nearly 40% to $1 billion in 2024, even though its revenue increased by 19% to $38 billion. The company’s value peaked at $100 billion in 2022, dropped to $66 billion in 2023, and could fall further to around $30 billion as it prepares for an IPO in London. Shein had originally planned to go public in the US but changed plans due to political opposition.
Despite these issues, India is still an important market for Shein. The fast fashion industry in India is expected to grow 5 times from $10 billion in FY24 to $50 billion by FY31, according to reports. Shein and Reliance have not officially commented on the renegotiation reports, but they are believed to be exploring ways to save parts of the deal as global trade dynamics evolve.
Reliance Industries Limited is a multinational conglomerate based in Mumbai, Maharashtra. The company operates across various sectors including energy, petrochemicals, natural gas, retail, telecom, entertainment, mass media, and textiles.
On April 15, at 2:25 PM IST, Reliance Industries share price was trading at ₹1,243.10, up ₹24.15 or 1.98% for the day. The stock opened and hit a high of ₹1,251.00, while the day’s low stood at ₹1,237.10. Over the past 52 weeks, the stock has touched a high of ₹1,608.80 and a low of ₹1,114.85.
As global trade tensions reshape supply chains, Shein’s ambitious India plans face uncertainty. However, with India’s fast fashion market poised for major growth, both Shein and Reliance may still find common ground to adapt and move forward.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Apr 15, 2025, 2:54 PM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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