Could Elon Musk’s newfound political influence help him finally crack India?

It is easy to believe that Elon Musk’s reach knows no limits. But while the world’s richest man may control a space satellite empire, own one of the largest social media platforms, produce the world’s bestselling electric car, and have been given carte blanche by Donald Trump to gut the US government, there is one market that Musk has yet to properly crack: India. Now, with his newfound influence over the Trump administration and global geopolitics, it appears likely that Musk’s entrance into the Indian market, both with his Tesla electric cars and his Starlink satellite internet, may come smoother and faster than expected. When the Indian prime minister, Narendra Modi, travelled to Washington to meet Trump earlier this month, he also sat down privately with Musk, where according to the Indian government, the pair “discussed strengthening collaboration between Indian and US entities in innovation, space exploration, artificial intelligence, and sustainable development”. Trump put it more bluntly: “I assume he [Musk] wants to do business in India.” Up till now, India’s 110% tariffs on imported electric vehicles have prevented Tesla from entering the fast-growing Indian market. However, Musk vowed last year that Tesla would be in India “as soon as humanly possible” – and after his recent encounter with Modi, it seems he is keen to make that a reality. Tesla has already begun advertising for jobs in Mumbai and Delhi, and has signed a lease to open its first showroom in Mumbai. Tesla could also take advantage of a new Indian government scheme that lowers import tariffs on electric vehicles to just 15% if they commit to investing $500m within three years in a factory that will manufacture the cars. However, the tax break applies only to the first 8,000 vehicles, a limit Tesla is likely to push back on. A Tesla factory would be a boon for India, a country that is desperate for foreign investment and job creation, particularly in manufacturing. Nonetheless, Musk has a chequered record for his commitments to investing in India. Last year, he left the Modi government reeling after he made high-profile plans to travel to India, and had dangled the possibility of a $3bn investment to build a Tesla factory in the country, only to cancel the trip at the last minute. Instead, he travelled to rival China – another huge market that Musk has been equally keen to capitalise on – to cut a major deal. Tesla also faces stiff competition from Indian manufacturers, who are already making and selling popular electric SUVs for about a quarter of the £35,000 starting price that a Tesla costs, which would be far above the budget of most Indian families. (Sales of Tesla cars are also plummeting globally, with a 45% decline in Europe in January.) Trump, too, has appeared less enthusiastic about Musk’s ambitions to start making Teslas in India. “Now, if he built the factory in India, that’s OK, but that’s unfair to us. It’s very unfair,” Trump told Fox News. Another possibly more lucrative finger in India’s pie for Musk could be Starlink, the satellite internet technology operated by his SpaceX company. Globally, Musk already has a dominant lead on satellite internet, with more than half of all satellites in the skies. Since 2021, he has been fixated on getting Starlink into India. While the current appetite for satellite internet in India is tiny, it is expected to grow to a $1.9bn (£1.5bn) market by 2030 according to Deloitte and is seen as a crucial entry point into India’s flourishing telecomms industry. Speaking to reporters earlier this year, after Trump’s inauguration, at which Musk was highly prominent, India’s communications minister confirmed that Starlink was in the process of seeking necessary security permissions to operate in India. Jyotiraditya Scindia said: “When you check all the boxes, you get the licence. If they [Starlink] do that, we will be very happy.” Yet in India, telecoms, including satellite internet, are among the most strictly regulated and controlled industries in India, placing vast obstacles in the way of foreign companies such as Musk’s being granted security permissions to operate. In particular, Musk’s close connections and business interests in China and the use of Starlink in the Ukraine war were seen as possibly insurmountable cybersecurity issues, as well as the ability of SpaceX to be able to control access to Starlink’s satellite internet from outside the country. The Indian governmentunder Modi has routinely ordered internet providers to block critical online content and used internet blackouts as a means of information control. These fears could be heightened after sources in the Indian state of Manipur, which borders Myanmar, told the Guardian earlier this year that Starlink was already being used by militant groups in the state to circumvent regular internet shutdowns being imposed after outbreaks of ethnic violence. A recent Indian thinktank report warned that Starlink was a “wolf in sheep’s clothing”, citing its use by US intelligence agencies and military, and warned of its potential to be used to undermine Indian security. Yet, after the election of Trump, some believe that the Indian government may be more willing to side-step those concerns. “I think before the US election results came through, India would have had their doubts about giving Musk’s Starlink security clearance,” said Nikhil Pahwa, the founder of MediaNama, an Indian tech news platform. “One of the things that India relies on is control over internet access and control over its operators. But now that Musk is a part of the US government, his leverage in India has certainly increased and his chances of Starlink clearing security approvals have probably improved dramatically – or at least will happen much faster.” Pahwa said the decision on Starlink by the Indian government was now “as much of a political decision as a security decision”. What’s been called “Starlink diplomacy” – opening up the country to Musk’s satellites in an apparent attempt to gratify the Trump administration – has already been evident in neighbouring Bangladesh, where this week the country’s interim leader, Muhammad Yunus, suddenly extended an invitation for Musk to launch Starlink in the country within 90 days. Even prior to the re-election of Trump, the Indian government had already made manoeuvres favourable to Starlink’s ambitions. In October, the government announced that satellite spectrum for broadband would be allocated administratively rather than through auction, something that Musk had lobbied hard for. “We will do our best to serve the people of India with Starlink,” said Musk on X in response. The decision means that Starlink has a far better opportunity to compete against Indian telecoms companies in the battle for control over the country’s satellite internet market. It was met with anger by some of the country’s biggest operators, such as Jio, who also have vast ambitions in the satellite internet space, and have since been lobbying the government to reverse its decision on the auction. One of the main benefits of satellite internet is that it can offer internet access even in the most remote areas. However, in India, most people living in rural areas are unlikely to be able to afford it, unless at heavily subsidised prices. Prasanto K Roy, a technology analyst, said it could set off a pricing war with India’s biggest telecom operators if Starlink repeated what it has done in Africa with heavily reduced pricing, where Starlink costs about $10 compared with $120 in the US. Jio, whose success in mobile internet came from undercutting every competitor, making India’s mobile internet some of the cheapest in the world, is likely to follow suit. “Starlink won’t find it as easy in India as it has in other markets, there is very strong competition here so it will be hard for it to gain a monopoly, even with low prices,” said Roy. He added: “Those using Starlink are obviously going to be a very tiny niche at the top of the socioeconomic pyramid. But once he’s got a hold, it is something Musk could really leverage in India.”