Post a failed intrusion attempt by Chinese troops within Indian territory, Indo-China ties have been at their worsening best. Responding to the Chinese, India then announced a ban on 59 Chinese apps, including the hugely popular TikTok. And while it has only been India launching attacks from the business front, it seems as if China is now looking to flex its business muscle as well. To that end, Alibaba is reportedly precluding from any investments in Indian startups for at least the coming 6 months.
This comes via a report from Reuters, which cited two people familiar with the matter, who said that the company will make no further investments to expand its portfolio in the country. However, it will not actively try to reduce its presence as well, either by selling stakes or via exit investments. This arrangement will stay in place for at least 6 months.
“Alibaba and a few others have put on hold their India investment plans for six months and they are hoping that things would cool off a bit after that,” said one of the sources to Reuters, adding that “No one is planning to put their stakes in Indian ventures on the block given the market condition and the fact that there aren’t many buyers.”
Acrimony rose between the two countries due to a military dispute at the Galwan valley where both parties lost soldiers. In retaliation, India decided to answer in a more nuanced manner, banning TikTok along with 58 other apps that originated from mainland China. Moreover, it extended this measure to ban several dozen more apps weeks later.
Now, China is planning to take a page out of its rival’s playbook and take a more diplomatic route to its attack as well.
Alibaba and its financial arm Ant Group have invested more than $2 billion in Indian companies since 2015 and participated in funding rounds of at least another $1.8 billion. Moreover, it owns a 30% stake in PayTm, the most valued Indian startup to date, as well as a large share in the likes of Zomato and BigBasket.
Ant Financial had pledged $150 million for Zomato earlier this year, of which it has only delivered $50 million so far. However, in its IPO prospectus, the group said, “A change in foreign investment regulation in India led to our further evaluation of the timing of our additional investment in Zomato.”