Shein and Reliance Retail have announced plans to rapidly scale Shein’s India operations and sell thousands of India-made Shein pieces around the world within the next year, sources tell Reuters. So what does this mean for Indian garment production as a whole?
For some context, Shein originally launched in India in 2018, and was then banned from the country in 2020 through a larger governmental effort against China-linked firms. The low-cost retailer made its way back to India as of this February through a licensing deal with Reliance Retail, one of India’s largest multinational conglomerates. To date, Reliance has contracted 150 Indian garment factories to create 12,000 designs, with plans to grow to 1,000 factories in the next year.
With the escalations in Sino-US trade conflicts over the past few months, many fast fashion giants are actively seeking out diversification of their manufacturing and finding a potential candidate in India. Known for its textile expertise, skilled workforce, and growing public and private investment in production, India is poised for growth in the global garment industry and is now drawing renewed attention from large-scale international brands. Yet for a country with such a rich textile history and focus on eco-conscious and small batch production, such moves by companies like Shein may cause major shifts in fashion practices, factory operations and export power within the country.
The Shift Toward Synthetics
One indicator of incoming shifts comes from a source at Reliance, who mentioned to Business of Fashion that “Reliance plans to work with new suppliers to source fabric - especially fabric made using synthetic fibres where India lacks expertise”. Currently, it’s estimated that less than 40% of India’s clothing exports contain synthetics, whereas 70% of clothing bought by major importing countries is made of synthetics. While growth in synthetic production could significantly boost export volume, clothing from India has historically been known for its quality and craftsmanship, leading to a higher share of entry into contemporary and luxury markets compared to exports from other major producers like China and Bangladesh. A shift toward synthetic production could negate that association and shrink luxury market opportunity.
The Scale of Production
Second is the sheer volume of factories that the partnership will be contracting for their expansion. Sources say the Shein-Reliance partnership plans to expand to 1,000 factories within a year. Given the estimated 3,400 large textile mills across India, creating deals with such a large share of India’s textile production sector could cause ripples in the opportunity and partnership landscape for local as well as other small international brands. As the Reliance-Shein partnership enters the bidding landscape for factory contracts, other brands could potentially see increases in competition, MOQ requirements, and pricing from suppliers.
The Cost of Lower Prices
One so called advantage of the partnership is increased employment opportunities as Shein helps grow the Indian textile economy, but (quite literally) at what cost? Sources told Business of fashion that “in the women’s dresses category, [Shein India’s] cheapest item is priced 349 Indian rupees ($4) versus $3.39 on the US site”. To address those disparities, the sources mention “Shein’s Indian partner Reliance, which operates the app, is working with suppliers to assess whether they can replicate Shein’s global best-sellers at lower cost.” The pressure to match these ultra-low prices could force Indian suppliers to cut costs and re-evaluate labor standards, raising concerns about the health of the country’s production sector.
India’s textile economy is poised for growth, and Shein’s entry through Reliance Retail could accelerate that expansion. But the speed and direction of this growth raises real questions about what may be gained and what could be lost. As India positions itself as a major player in fast fashion exports, it risks weakening its longstanding reputation for quality, craftsmanship, and value in the global luxury market. And while increased factory demand might bring jobs, it could also strain supplier capacity, drive up costs for smaller brands, and pressure manufacturers to cut corners in the pursuit of ultra-low pricing. The Shein-Reliance partnership may mark a turning point for Indian garment production, but whether it’s a win for the industry depends on how this growth is managed.
