Online shopping app Shein’s return to India hinges on giving Reliance strict local data, operational control

Shein, the Chinese fashion retailer, has been granted a rare exception to India’s ban on Chinese-linked apps, but with stringent conditions ensuring its operations remain entirely local. According to a parliamentary disclosure by Commerce Minister Piyush Goyal on Tuesday, Reliance Retail Ventures Limited will maintain full ownership and operational control of the platform, with Shein functioning purely as a technology partner.

The move marks Shein’s carefully structured re-entry into India after its ban in mid-2020 amid rising national security concerns over Chinese apps.

Under the government-approved deal, Shein must comply with the following requirements:

    •    Local Hosting: The platform will be hosted entirely on Indian infrastructure.
    •    Data Sovereignty: All Indian customer data—personal and non-personal—will remain in India. Shein will have no access to or rights over this data.
    •    Security Oversight: The platform will undergo regular audits by government-empanelled cybersecurity auditors, a level of scrutiny uncommon for standard retail operations.

“Shein will operate purely as a technology partner, with Reliance maintaining complete ownership and control,” Goyal said in the disclosure.

Reliance Retail, a wholly owned subsidiary of India’s largest conglomerate Reliance Industries, will oversee Shein’s local operations. The agreement aligns with the government’s push for economic self-reliance and increased domestic production.

As part of the deal, local manufacturers and suppliers will produce Shein-branded products for both domestic and global markets, a move expected to boost India’s textile industry and create employment opportunities.

Why Shein Was Banned

Shein, once a leading online retailer in India, was among the 300+ Chinese-linked apps banned starting in 2020 over national security concerns. Other major apps banned included ByteDance’s TikTok, Alibaba’s UC Browser, and Xiaomi’s Community and Video Call apps.

China has repeatedly criticised India’s actions, calling them a violation of World Trade Organization (WTO) guidelines and harmful to the “legitimate rights and interests of Chinese companies.”

The process for Shein’s return underwent extensive government vetting, involving the Ministry of Textiles, Ministry of Home Affairs, and the IT ministry before receiving approval.

The Shein-Reliance deal could set a precedent for other Chinese-linked companies hoping to re-enter the Indian market. By ensuring local operational control, data sovereignty, and government oversight, the arrangement addresses India’s national security concerns while enabling economic collaboration.