The exciton-exciton interaction energy of tellurium doped CdSe colloidal quantum dots is experimentally investigated. The dots exhibit a strong Coulomb repulsion between the two excitons, which results in a huge measured biexciton blue shift of up to 300 meV. Such a strong Coulomb repulsion implies a very narrow hole wave function localized around the defect, which is manifested by a large Stokes shift. Moreover, we show that the biexciton blue shift increases linearly with the Stokes shift. This result is highly relevant for the use of colloidal QDs as optical gain media, where a large biexciton blue shift is required to obtain gain in the single exciton regime.