The Art of the Exception: Why India Is Partnering with Alibaba While Keeping TikTok Banned 

The Art of the Exception: Why India Is Partnering with Alibaba While Keeping TikTok Banned 

In the high-stakes chess game of geopolitics and technology, few moves are as intriguing as the one just made by New Delhi. In February 2026, the Indian government’s flagship Startup India initiative announced a formal collaboration with Alibaba.com, the B2B e-commerce giant owned by the Chinese conglomerate Alibaba Group. 

At first glance, this partnership looks like a paradox. For nearly six years, India has maintained one of the world’s most aggressive postures against Chinese technology. Since a deadly border clash in 2020, New Delhi has banned over 300 Chinese-linked apps, including consumer titans like TikTok, WeChat, and Alibaba’s own cross-border consumer platform, AliExpress. The rhetoric has been tough, national security concerns have been paramount, and the digital divide between the two Asian giants has seemed deeper than ever. 

So why, in 2026, is the Indian government officially linking arms with a Chinese tech platform? 

The answer reveals a sophisticated, pragmatic shift in India’s strategy: a clear-eyed distinction between consumer data risks and economic opportunity. This isn’t a thaw in relations; it is a carefully calculated carve-out designed to fuel India’s export ambitions. 

The Ghost of 2020: A Baseline of Mistrust 

To understand the significance of this week’s news, one must revisit the summer of 2020. Following a skirmish in the Galwan Valley that resulted in casualties on both sides for the first time in decades, Indian nationalism spiked, and the government responded with a digital sledgehammer. 

Overnight, apps that had become part of the social fabric—TikTok, with its massive creator economy; PUBG Mobile, with its millions of daily players; and AliExpress, a go-to for affordable electronics—vanished from Indian app stores. The government cited security concerns under Section 69A of the Information Technology Act, claiming these apps posed a threat to “sovereignty and integrity of India.” 

The message was unambiguous: When it comes to consumer data and public sentiment, China’s technology was not welcome. 

Yet, in that same period, Alibaba.com never left. It continued operating quietly, maintaining a B2B marketplace that connected Indian manufacturers to buyers in Africa, the Middle East, and Southeast Asia. Unlike TikTok, which thrived on harvesting user behavior to fuel an addictive algorithm, Alibaba.com’s value proposition was transactional. It was a digital trade route, not a digital public square. 

The Startup India Collaboration: More Than Just a Listing 

The new program announced this week is not simply about getting Indian sellers to open accounts on Alibaba.com. That has been possible for two decades. Instead, this is a deeper, structured intervention. 

Under the partnership, Startup India will help identify and support Indian tech startups that can act as intermediaries—or “onboarding partners”—for the country’s vast network of micro, small, and medium enterprises (MSMEs). These startups will receive commissions and technical support to help small manufacturers digitize their catalogs, navigate cross-border logistics, and manage payments. 

For a small handicraft exporter in Moradabad or a textile manufacturer in Tirupur, Alibaba.com represents a gateway to 50 million active buyers worldwide. But many of these traditional businesses lack the digital literacy to leverage such a platform effectively. By incentivizing Indian startups to bridge that gap, the government is essentially outsourcing the “digital transformation” of its export sector to agile domestic players, while utilizing the infrastructure of a Chinese giant. 

Rocky Lu, head of India business at Alibaba.com, framed the initiative as a continuation of the company’s long-standing mission. “Our focus continues to be on leveraging our digital infrastructure to help ‘Made in India’ products reach an international audience,” he told TechCrunch. 

This focus on exports is the key differentiator. The data generated on Alibaba.com is largely commercial—product specifications, order volumes, shipping routes. It is far less sensitive than the psychographic profiles generated by consumer apps. 

India’s “Good Cop, Bad Cop” Tech Policy 

The partnership highlights a mature and differentiated approach that political analysts are calling a “dual-track” policy toward China. 

“India is drawing a very bright line,” said George Chen, partner and co-chair of the digital practice at The Asia Group. “China bans Western social media for its citizens but eagerly uses Facebook and Google ads to sell to the West. India seems to be learning that same lesson.” 

Indeed, China has long practiced this duality. Facebook, Instagram, and Google Search are blocked for individual users in China, yet Chinese exporters are among the biggest spenders on those very platforms to reach overseas customers. India is now adopting a mirror image: protect the domestic consumer internet from perceived Chinese surveillance and influence, but embrace Chinese commercial platforms that can help Indian businesses compete globally. 

Kazim Rizvi of The Dialogue, a New Delhi-based think tank, noted that this partnership is a sign of “selective engagement.” However, he warned that for this model to succeed, regulatory clarity is essential. “Predictable policy environments will help ensure that startups feel confident participating in such initiatives,” Rizvi said. 

Startups are risk-averse by nature. If the government’s stance toward Chinese technology can shift suddenly based on the next border skirmish, these intermediary firms may hesitate to build their business models on Alibaba’s foundation. 

Why Alibaba Needs India, and India Needs Alibaba 

For Alibaba.com, this partnership is a lifeline to relevance in a massive market. While the group’s consumer arms (like AliExpress) have been eviscerated in India, the B2B unit has persisted. By formalizing ties with the government, Alibaba.com gains a veneer of legitimacy and a stamp of approval that no amount of private marketing could buy. 

Moreover, it positions Alibaba.com not as a foreign interloper, but as a utility—a piece of infrastructure necessary for India to hit its ambitious export targets. The Indian government has set a goal of $2 trillion in exports by 2030. With MSMEs contributing nearly half of the current export tally and about 31% of the GDP, digitizing these small players is not optional; it is imperative. 

Alibaba.com is leaning into this narrative. The launch of its “Trade Assurance” program in India in June 2025 was a calculated move to build trust. By offering payment protection and dispute resolution, it directly addresses the fears of small Indian exporters who have historically been wary of cross-border fraud. The platform is trying to position itself as a safer, more reliable alternative to fragmented trade channels. 

The Geopolitical Tightrope 

This collaboration does not exist in a vacuum. It comes at a time when relations between Beijing and New Delhi are showing tentative signs of stabilizing at a functional level. Chinese representatives are reportedly expected to attend the India AI Impact Summit soon, suggesting a reopening of technical dialogues. 

However, officials have been quick to clarify that this is not a reset. The bans on consumer apps remain firmly in place. TikTok is still banned. PUBG (now Battlegrounds Mobile India) has only been allowed to operate after proving it was a completely separate entity with Indian investors and data localization. AliExpress remains blocked. 

The signal to Beijing is clear: We will buy your B2B services, but we will not allow your consumer platforms to shape our society. 

A Blueprint for the Future? 

For other emerging economies watching the India-China tech cold war, this partnership could serve as a blueprint. It suggests that blanket bans are a blunt instrument. The future of tech geopolitics may lie in such nuanced segmentation—allowing economic utility while blocking perceived cultural or security threats. 

As Indian startups begin to scale up under this new program, the real test will be execution. Can these small tech firms successfully onboard millions of traditional manufacturers? Will the data-sharing agreements between Indian intermediaries and Alibaba.com remain transparent? And most importantly, what happens if the political winds shift again? 

For now, the partnership between Startup India and Alibaba.com represents a mature acknowledgment of a simple reality: In the race to become the world’s factory, India needs the best logistics. And sometimes, the best logistics are managed by a neighbor, even an unfriendly one. The key, as India is demonstrating, is to use the neighbor’s highway while maintaining strict control over who gets to enter your home.