Chinese internet giant Alibaba Group has put on hold plans to invest in Indian startups amid geo-political tensions between the two countries, Reuters reported Wednesday, citing two unnamed sources.
The Chinese group, which has invested more than $2 billion in Indian startups since 2015, plans to freeze new investments in Indian startups for at least six months, the report said, adding Alibaba does not intend to reduce its stakes in existing portfolio firms.
Alibaba Group, and its affiliate Ant, are major investors in a handful of unicorns in India, including Paytm, the most valued Indian startup, in which it owns about 30% stake, food delivery startup Zomato, grocery delivery startup BigBasket and e-commerce firm Snapdeal.
The decision comes amid geo-political tensions between the two neighboring nations, which escalated when more than 20 Indian soldiers were killed in a military clash in the Himalayas in June. Ever since, “Boycott China” — and variations of it — has been trending on Twitter in India as a growing number of people posted videos demonstrating destruction of Chinese-made smartphones, TVs and other products.
In a move that many saw as retaliation, New Delhi blocked TikTok and 58 other Chinese apps in the country in late June and extended the ban to several dozen more apps weeks later. India, the world’s second largest internet market, also amended its foreign direct investment policy earlier this year to make it difficult for Chinese investors to write new checks to Indian firms.
Zomato announced in January this year that Ant Financial had committed an investment of $150 million into the startup. The Gurgaon-based startup has only received $50 million of that capital so far, one of its other leading investors said last month.
“A change in foreign investment regulation in India led to our further evaluation of the timing of our additional investment in Zomato,” Ant Financial disclosed in its IPO prospectus Tuesday.