- Due to geopolitical tensions between Indian and China, Alibaba Group has decided to put a hold on its further investment in India.
- However, Alibaba doesn't have any plans to reduce its stakes or exit investment from the Indian companies.
- Most of the Indian companies and startups are funded by Alibaba and Tencent Holdings etc
Chinese multinational conglomerate Alibaba Group decided to put a hold on its further investment in India, amid federal tensions.
Although Alibaba Group doesn't have any plans to reduce its stakes or exit its investments from Indian startups like Paytm, Zomato, Snapdeal, Bigbasket, and others.
Furthermore, Alibaba Group and its subsidiaries Alibaba Capital Partners and Ant Group have invested more than $2 Billion in India since 2015. Alibaba backed startups such as Zomato, Paytm, Snapdeal, Bigbasket, Xpressbees, and others
The decision of the Alibaba Group could break the fundings and further investments for several Indian startups. Also, The decision will lower the growth of the startups which were seeking continuous investments.
Moreover, Alibaba Group subsidiary, Ant Group, which was preparing for the IPO launch in India, is now facing issues due to its federal tensions.
SInce the clash between India and China, the Indian government changed its foreign investment policy, Ant Group, and other Chinese companies facing issues while investing in Indian companies.
Further, border tensions between India and China have created a kind of trade war for both of these countries. Earlier this year, the Government banned many Chinese apps such as TikTok, Clubfactory, due to national security concerns.
According to the reports, Alibaba and its affiliates will hold their further investment in India for the next six months, hoping things will get a bit better after the period.
Since the 20 Indian soldiers were killed in the border clash with Chinese soldiers, escalated tensions, India imposed stricter curbs on Chinese goods and businesses and called to boycott Chinese products.
Due to geo-political tensions, The Indian government has put in investments from China under greater scrutiny to prevent opportunistic takeovers during COVID-19 pandemic.