Shein, the world's biggest fast-fashion giant, is reviewing its strategic collaboration with Reliance Retail because of increasing trade tensions between China and the U.S. The initial deal was intended to make India a major production hub for Shein's worldwide operations, absorbing Indian MSMEs into its supply chain. But China's attempts to maintain local manufacturing have resulted in the possible reduction of Shein's India plans.
Key Highlights
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Trade Tensions Effect: The U.S. has levied high tariffs on Chinese products, and China has discouraged producers from relocating abroad. This has made it difficult for Shein to diversify away from Chinese production.
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Partnership Reconsideration: Shein and Reliance are re-negotiating their partnership, which could lead to a watered-down version of their original plans to establish a global sourcing center in India.
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Shein's India Re-entry: Shein re-entered India in early 2025 with a partnership with Reliance Retail after a five-year ban was lifted. The agreement involves local data storage and domestic manufacturing in line with India's "Make in India" policy.
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Global Trade Dynamics: The current trade war between China and the U.S. is compelling business houses such as Shein to rethink their global supply chain and manufacturing model.
This growth reflects the difficulties encountered by global firms in dealing with intricate geopolitical and trade landscapes.
Source: Economic Times, Business Standard, India Today.