Lok Sabha Question No. 307 (STARRED), answered on 2024-12-17
Subject: Re-entry of Chinese Fashion Brand Shein
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Sasikanth Senthil

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE LOK SABHA

STARRED QUESTION NO. 307.

TO BE ANSWERED ON TUESDAY, THE 17 TH  DECEMBER, 2024.

## RE-ENTRY OF CHINESE FASHION BRAND SHEIN

## *307.  SHRI SASIKANTH SENTHIL:

## Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) whether the Government has considered the re-entry of the Chinese fashion brand Shein into the Indian market, following its previous ban in June 2020 due to geopolitical tensions with China;
- (b) if so, the details of the steps taken by the Government to ensure that the reentry  complies  with  India's  national  security,  foreign  investment,  and  data privacy regulations and if not, the reasons therefor; and
- (c) the details of measures taken by the Government to safeguard local business interests and ensure fair competition in the retail and e-commerce sector?

## ANSWER वाणिज्य  एवं उद्योग मंत्री )श्री पीयूष गोयल( THE MINISTER OF COMMERCE & INDUSTRY (SHRI  PIYUSH GOYAL)

- (a) to (c): A statement is laid on the Table of the House.
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## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO. 307 FOR  ANSWER  ON  17 TH   DECEMBER,  2024  REGARDING  RE-ENTRY  OF  CHINESE FASHION BRAND SHEIN.

- (a) & (b): The Ministry of Electronics & Information Technology (MeITY), Government of India , on 29.06.2020  blocked Shein application, used in both mobile and non-mobile Internet enabled devices, under section 69A of the  Information  Technology  Act  2000  due  to    concerns  related  to  data security  and  privacy.  Sale  of  Shein  branded  products  in  India  was  not banned.    Reliance  Retail  Ventures  Limited  ('RRVL'),  India  through  its subsidiary  RRL  (Reliance  Retail  Ltd),  has  entered  into  a  technology agreement  with Roadget  Business  Pte.  Limited ('Shein') based  in Singapore to develop an indigenous e-commerce retail platform ('Platform').    The  platform  is  intended  to  create  a  network  of  local manufacturers  and  suppliers  who  will  manufacture  products  under  the brand of Shein and sell them domestically and globally. It is expected that this will help  in growth of Indian textiles manufacturing sector including local handicrafts and create significant employment.

Accordingly, Ministry of Textiles after consultation with Ministry of Electronics  and  Information  Technology  (MeitY)  (which  in  turn  consulted Ministry of Home Affairs) conveyed no objection on the proposal of RRVL. The license agreement covered the protection that ownership and control of the  Platform  will  always  remain  with  RRVL  through  its  wholly  owned subsidiary. As per the agreement, at all the times, the Platform will be hosted on infrastructure in India and all platform data (personal and non-personal data generated from the operation of the Platform including all data collected from Indian customers) will remain in India with Shein having no access to, or  rights  over,  such  data.  The  agreement  requires  consenting  parties  to follow  Indian  laws  and  ensure  localization  of  infrastructure  and  Platform data. RRVL is also advised to ensure compliance with all existing laws of India and security audit of complete infrastructure can be undertaken by any government empaneled cyber security auditor.

- (c): The  Government  has  been  focusing  on  protecting  the  interests  of  small retailers  and  traditional  kirana  stores  while  safeguarding  local  business interests, thereby promoting fair competition. Various measures in the form of Acts, Rules, and Policies have been put in place to ensure a level playing field and address anti-competitive practices by e-commerce platforms. For instance, the initiative of the Open Network for Digital Commerce (ONDC) makes  e-commerce  more  inclusive,  enabling  small  and  medium-sized businesses  to  use  any  ONDC-compatible  applications  instead  of  being constrained by platform-centric policies. The e-commerce sector operates under a comprehensive legislative framework. Key Acts applicable to the sector include the Consumer Protection Act, 2019; the Consumer Protection

(E-commerce) Rules, 2020; and the Competition Act, 2002, among others. In  this  context,  the  Competition  Act,  2002  mandates  the  Competition Commission of India (CCI) to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other competitive agreements and abuse of dominance by enterprises in all the participants in markets, in India. The CCI looks into matters relating to antisectors of the economy.

Additionally, the Foreign Direct Investment (FDI) policy on e-commerce and retail sectors reflects the Government's intent to safeguard local business interests. Para 5.2.15.2 of the FDI Policy on e-commerce [as amended vide Press Note 2 (2018 Series) dated 26.12.2018 issued by the Department for Promotion of Industry and Internal Trade (DPIIT)], prohibits FDI in inventorybased models of e-commerce, where the inventory of goods and services is owned  by  the  e-commerce  entity  and  sold  directly  to  consumers.  To safeguard and promote local business interests, the FDI Policy for Single Brand Retail Trade (SBRT) mandates that for foreign investment beyond 51%, 30% of the value of goods purchased should be sourced from India, preferably from Micro, Small, and Medium Enterprises (MSMEs), village and cottage industries, artisans, and craftsmen across all sectors. Similarly, the FDI Policy on Multi-Brand Retail Trading (MBRT) outlines several conditions to ensure that the benefits of FDI in the sector create commensurate forward and  backward  linkages.  Furthermore,  to  curb  opportunistic  takeovers  or acquisitions of Indian companies, amendments were made to the FDI policy via Press Note 3 (2020 Series). According to these amendments, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

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