BENGALURU: Uber and China’s Didi Chuxing have struck an unexpected trans-Pacific partnership which signifies the American company’s capitulation in the Middle Kingdom and portends an intensification of its drive to conquer India.Analysts and industry observers were befuddled how exactly the Uber-Didi bonhomie would play out in India, but all were unanimous that the ramifications would be major. The de facto acquisition of Uber’s Chinese operations by Didi set off furious commentary around the world.A few were conspicuously speechless — Ola , the India market leader and rival to Uber, and Ola’s main investor SoftBank. Two sources that ET spoke to also believe that Didi Chuxing and Uber may have signed a non-compete agreement for international markets. “It is likely that a clause for Didi to not compete with Uber in markets outside China or not finance any competition further is a part of the deal,” said one of them.Another said that under the terms of the pact, Didi cannot directly operate in markets Uber is present in, which means that in India it can invest a little more in Ola (its stake is in the single digit percentage) but cannot be the single-largest owner.On Monday, arch rivals Uber and Didi stunned the world by announcing that they are combining their businesses in China for a total valuation of $35 billion. Didi will also invest $1 billion in Uber, according to a report in Bloomberg, cementing the alliance between the global big boys of ridehailing and freeing Uber up to fight market-share battles in other important emerging markets. “India is the next battleground,” said a person who tracks the industry closely. “Uber is out of China, which means their ability to invest in India goes up 2x-3x,” he said.SoftBank and Didi Chuxing did not reply to ET’s queries. Uber and Ola declined to comment. Didi Chuxing’s decision to call a truce with Uber is significant as the Chinese company was leading a global alliance against the US rival. Besides investing in Ola, Didi Chuxing also invested in Indonesia-based GrabTaxi and US-based Lyft as a part of the alliance which aimed to share customers and technology.The acquisition puts a question mark on this alliance, although Didi said in its statement that it “will continue to work with global partners in connecting local resources to create the best possible cross-border ridesharing experience for their users”.Uber is the latest American technology multinational to eat humble dumpling in China, a market which has fed the same dish to Google, Facebook, Twitter and Amazon. But these companies have prospered in India, where they are either market leaders or close challengers for the top spot.Expert said Uber is likely to follow online retailer Amazon, which has been spending aggressively in India after losing out in China to local rivals. While pulling out of China will help it move towards profitability as it plans a public listing, it will need to keep up momentum in India where Ola has been able to retain its market leadership through lower-cost alternatives like Ola Mini while also strengthening its supply of drivers and cars.“This is the beginning of sanity coming to this market. They (Uber) always had a focus on India and access to capital,” said an investor in Ola.Opinions are split about whether the deal helps or hurts Ola’s fundraising prospects, as it puts Didi’s participation in the round under question.“It could embolden international investors to put more money in Ola, since it proves local companies can win,” said Rehan Yar Khan, an early investor in Ola and founder of venture capital firm Orios Venture Partners, who also added that flip side could be Uber investing more aggressively in India.But some others feel that the deal will make the future of Ola, led by IIT-Bombay alumnus Bhavish Aggarwal, more uncertain. “There is definitely some longterm implication as Didi was working closely with Grab, Lyft and Ola. We may see more consolidation in the coming days,” said Jaspal Singh, a transport analyst at Valoriser Consultants.Besides creating a more complex situation for a potential new round of funding, the Didi-Uber deal may also create investor-relations hassles for Ola. “Another issue which Ola will have to address is access to data which Uber may have access to as a part of this deal,” said another investor who holds an indirect stake in Ola.As a part of the acquisition, Didi Chuxing founder Cheng Wei is joining Uber board while Uber CEO Travis Kalanick will join Didi Chuxing. Uber is expected to hold 17.7% in the combined entity in China. Didi said it will also hold a minority stake in Uber, without disclosing details.Kartik Hosanagar, a professor at The Wharton School, said that Uber will now be a more important part of Didi's global strategy than Ola and Grab. This is reflected in the fact that Uber and Didi are each making a board seat available to the other, he said.“That will mean a lot of strategic information being traded among the two and therefore will require Didi distancing itself from Ola and others.”