China’s Alibaba Suspends Its India Investment Plan Amidst Increased Scrutiny

China’s Alibaba Suspends Its India Investment Plan Amidst Increased Scrutiny

China’s Alibaba Group will reportedly go slow on its plan to invest in Indian companies and not sign any fresh deals in the wake of increased scrutiny on Chinese investments and rising tensions between the two nations. 

 

Sources told the Economic Times that the Chinese tech giant which has been instrumental in the growth of several Indian startups, will not make fresh investments in the country for at least the next six months.

 

However, the company will continue with its existing investments and won’t reduce its stakes, the sources added.

 

The pause in new investments also comes due to changes in foreign direct investment (FDI) rules that mandate prior government approval for investments from countries that have a land border with India.

 

With over $2 billion worth of investments in Indian companies since 2015, and participation in funding rounds of another $1.8 billion, the Chinese conglomerate and its subsidiary units, Alibaba Capital Partners and Ant Group, have been a major contributor in the Indian market, suggests data from PitchBook, which tracks private market financing.

 

Alibaba’s investments in India include the likes of Paytm, Zomato and BigBasket.

 

Ant Group, which is getting ready to launch an IPO (initial public offering), spelled out the challenges it faces in the current investment climate in India.

 

Ant, in its IPO filing said that a modification in FDI rules in India had led to a re-evaluation of its further investment in Zomato.

 

Meanwhile, Alibaba is yet to make a statement.

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