Fast fashion giant Shein may be reconsidering the scope of its global sourcing partnership with Reliance Retail citing sources close to the matter. The move comes amid escalating trade tensions between the United States and China, which have seen Beijing tightening its grip on domestic manufacturers and discouraging them from shifting operations abroad.Â
Chinese govt cracks down on domestic manufacturers
One of the key goals of the Reliance-Shein collaboration, announced during Shein’s India relaunch earlier this year, was to establish India as a strategic sourcing hub for the brand’s global operations. However, with the Trump administration slapping a steep 145 per cent tariff on Chinese-made goods, Chinese authorities stepped in to retain domestic manufacturing. As a result, Shein’s plans to expand production from India may now be scaled back.
While the US has temporarily paused reciprocal tariffs—including the 26 per cent duty on Indian goods — for 90 days, this suspension has not been extended to China. Tensions between the two world powers have continued to remain tense with Beijing retaliating with a 125 per cent tariff on US imports. Under these circumstances, Beijing remains wary of losing its global manufacturing dominance.
Shein-Reliance partnership and growth plans
This comes just months after Shein re-entered the Indian market through a partnership with Reliance Retail Ventures Ltd, nearly five years after it was banned during a government crackdown on Chinese-origin apps. The partnership allowed Shein to launch a standalone app operated and hosted by Reliance Retail, with all data stored within Indian infrastructure.The collaboration had also outlined broader ambitions, which included building an export-oriented ecosystem involving around 25,000 Indian MSMEs in garment manufacturing. Shein had committed to sharing technology and resources to enable Indian manufacturers to become part of its global supply chain. That vision now faces uncertainty amid shifting diplomatic and trade equations.
