Shein must surrender all data of Indian customers and control of its local operations to its partner, Reliance Retail, and keep operations fully local to re-enter the Indian market, according to new government disclosures that reveal how the apparel and accessories retailer secured a rare exception to India’s ban on Chinese-linked apps.
In a parliamentary disclosure on Tuesday, the Ministry of Electronics & Information Technology said that Shein will operate purely as a technology partner, with Reliance maintaining complete ownership and control of the platform through its wholly owned subsidiary, Reliance Retail Ventures Limited.
Reliance, India’s largest conglomerate, and Shein confirmed last year that they had struck a deal for the Chinese retailer’s return to the world’s most populous nation.
The platform will be subject to security audits by government-empaneled cyber security auditors, a level of oversight not typically required for retail partnerships.
The technology agreement between Reliance Retail and Singapore-based Shein requires the e-commerce platform to be hosted on infrastructure in India. All platform data, including personal and non-personal information collected from Indian customers, must remain in India, and Shein would have no access to or rights over such data.
The ministry’s answer offers the first look at how Shein managed to secure approval while hundreds of other Chinese-linked apps remain banned in India.
Starting mid-2020, India has banned over 300 Chinese-linked apps — including ByteDance’s TikTok, Alibaba’s UC Browser, and Xiaomi’s Community and Video Call — over national security concerns. Beijing said India’s ban on apps violated World Trade Organization guidelines and damaged the “legitimate rights and interests of Chinese companies.”
The process to unban Shein involved extensive government vetting, with the Ministry of Textiles consulting both the IT ministry and the Ministry of Home Affairs before granting approval, the government said on Tuesday.
Through this arrangement, local manufacturers and suppliers will produce Shein-branded products for both domestic and global markets, which the government expects will support India’s textile manufacturing sector and employment.