Reliance Retail plans to sell Shein products in India under license
Reliance Retail plans to develop an e-commerce platform to retail branded Shein fashion products in India. The license agreement between the Chinese and Indian businesses will not be classed as foreign direct investment.
The Foreign Direct Investment Proposal Review Committee has stated that Reliance Retail does not need to obtain formal approval to go ahead with the agreement because Shein is not making any equity investment into the Indian business. “Ownership and control of the platform will always remain with RRVL’s subsidiary, a 100% Indian company,” said an official source close to the matter, ET Bureau reported.
If Shein does wish to make an investment in Reliance Retail’s subsidiary in the future, the business will have to apply for approval under Press Note 3. The FDI Proposal Review Committee is led by the Union Home Secretary and its aim is to prevent other countries from circumventing Indian FDI laws and investing in Indian businesses.
The servers for the e-commerce platform will be exclusively hosted in India and the business has committed to promising not to transfer any customer data outside of India. Due to the localisation of the company’s infrastructure and its platform data, Shein will neither have access to nor rights over any data on the platform. This is designed to quell any security concerns over the safety of Indian data.
Shein and Reliance Retail’s partnership will also result in the fast fashion business integrating 25,000 micro, small, and medium businesses. This could create a sizeable export opportunity if Shein begins to source products from Indian manufacturers.
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