The ongoing tariff war between the US and China has put Mukesh Ambani’s Reliance Retail and Chinese fashion brand Sheen’s deal in tough situation. Now this deal is seen to be in danger. China has refused its manufacturers to shift the production to foreign countries, so that
Reliance and Sheen signed a deal in 2023, under which a desi e-commerce platform for Sheen was to be launched in India. The plan was to connect Indian Small and Medium Business (MSMES) to Sheen’s global supply chain. There was talk of adding and connecting around 25,000 MSMEs and increasing exports to India.
Impact on Reliance and Sheen’s deal
Sheen also hoped that she would reduce her dependency from China and focus on India. However, the US imposed 145% tariff on Chinese goods, after which China stopped its manufacturers from foreign production. Reliance-Sheen’s plan has been shaken by this. According to the ET report, the US moves that Chinese companies may shift production in low-tariffs like India. That is why China showed strictness. Now the talks are going on again between Reliance and Sheen and there is a positivity to scale down this deal. Both companies are looking for new options to deal with this problem.
Sheen made a comeback
In India, Sheen made a comeback with Reliance in February this year. Sheen app was banned after India-China border tension in 2020. This partnership was not only to increase sales in India, but also to connect Indian manufacturers to the global market. However, Tariff Jung has made it tough.
Experts say that if this deal is not fully successful, then the big chances of global exports for Indian MSMEs can be reduced. Also, Mukesh Ambani can also be harmed by this. Now the thing to see will be what plans the two companies make next to deal with this challenge.