Elon Musk’s Expanding Global Influence
It is simple to assume that Elon Musk’s influence is limitless. Although the richest man in the world may be in charge of an empire of space satellites, own one of the biggest social media networks, manufacture the best-selling electric car in the world, and have been given complete authority by Donald Trump to enviscerate the US government, Elon Musk has yet to successfully enter one market: India. Musk’s attempt to enter the Indian market, with his Tesla electric vehicles and Starlink satellite internet, might proceed much faster and more smoothly than initially thought, giving his newly gained influence over the Trump government and world affairs.
The Indian government affirms the fact that Musk and Prime Minister Narendra Modi “discussed strengthening collaboration between Indian and US entities in innovation, space exploration, artificial intelligence, and sustainable development” at a confidential meeting in Washington earlier this month.
Tesla’s Challenges in Entering India
Up until the present day, Tesla has been unable to tap into the fast-growing Indian market owing to the country’s 110% import taxes on electric vehicles. However, Musk assured last year that Tesla was going to land in India “as soon as humanly possible,” and it seems he is willing to make that occur after his recent meeting with Modi. In the wake of signing a lease to open its first showroom in Mumbai, Tesla has already started hiring in Delhi and Mumbai.
If Tesla promises to invest $500 million within three years in a facility that will make the cars, they may also be able to profit from a new Indian government program that cuts import duties on electric vehicles to just 15%. But only the first 8,000 cars are eligible for the tax incentive, which is a cap Tesla is probably going to oppose.
The Competition: Can Tesla Compete with Indian EV Makers?
India, which is in an urgent need of foreign investment and job creation, especially in the manufacturing sector, would benefit significantly from a Tesla facility. Elon Musk’s experiences with his investments in India, however, are uneven. He left the Modi administration in shock last year when he abruptly called off his high-profile plans to visit India and raised the prospect of a $3 billion investment to establish a Tesla factory there. To close a significant business, he instead flew to China, another huge market that Musk has been willing to tap into.
In addition, Tesla is up against fierce competition from Indian producers who are currently producing and marketing well-liked electric SUVs for around 25% of the £35,000 starting price of a Tesla, which is well out of reach for the majority of Indian families. (Tesla automobile sales are also falling sharply worldwide; in January, they fell 45% in Europe.)
Starlink’s Entry into India: A Game-Changer or a Security Concern?
Starlink, the satellite internet technology run by Elon Musk’s SpaceX company, may be another, potentially more profitable, piece of India’s pie. With about half of all satellites in orbit, Musk already holds a commanding lead in the global satellite internet market. He has been obsessed with bringing Starlink to India since 2021. Although there is now very little demand for satellite internet in India, Deloitte projects that the market would reach $1.9 billion (£1.5 billion) by 2030 and is regarded as a key gateway to the country’s thriving telecom sector.
Regulatory Challenges for Starlink in India
However, telecoms, especially satellite internet, are one of the most tightly regulated and supervised sectors in India, which makes it extremely difficult for international businesses like Musk to obtain security permits to operate. Specifically, Musk’s strong ties and commercial interests in China, Starlink’s involvement in the conflict in Ukraine, and SpaceX’s capacity to regulate access to Starlink’s satellite internet from abroad were viewed as potentially insurmountable cybersecurity challenges.
Under Modi, the Indian government has frequently utilized internet blackouts as a tool for information control and ordered internet companies to censor important online content.
Citing Starlink’s use by US military and intelligence services, a recent paper from an Indian think tank cautioned that it was a “wolf in sheep’s clothing” and that it could be used to compromise Indian security. However, some others think that the Indian government would be more inclined to ignore their worries now that Trump has been elected. Control over internet access and control over its providers are among the things India depends on. However, Musk’s influence in India has undoubtedly grown since joining the US administration, and his prospects of Starlink obtaining security certifications have likely significantly improved—or at the very least, will likely happen much more quickly.
This week, Muhammad Yunus, the Bangladesh’s interim leader, unexpectedly offered Musk to launch Starlink within ninety days, showing what has been known as “Starlink diplomacy”—opening the nation to Musk’s satellites in an apparent attempt to appease the Trump administration. The Indian government had already taken steps accepting of Starlink’s goals before Trump’s reelection. Musk had pushed hard for the government to announce in October that broadband satellite spectrum will be distributed administratively rather than through auction. Musk responded on X by saying, “We will try our best to serve the people of India with Starlink.”
As a result of the ruling, Starlink now has a much greater chance of competing with Indian telecom firms for market share in the nation’s satellite internet sector. Some of the largest operators in the nation, including Jio, who have lofty goals in the satellite internet market, were incensed by it and have since been urging the government to change its mind about the auction. The ability of satellite internet to provide internet connection even in the most remote locations is one of its primary advantages. However, unless the prices are highly subsidized, it is unlikely that the majority of rural residents in India can afford it.
Price Wars: Can Starlink Outcompete Jio and Other Indian Telecoms?
If Starlink were to replicate its far lower prices in Africa—Starlink costs roughly $10 compared to $120 in the US—it might start a pricing war with India’s largest telecom providers. Jio, which made India’s mobile internet among the cheapest in the world by undercutting all of its rivals, is probably going to do the same. It won’t be as simple for Starlink to establish a monopoly in India as it has in other areas because of the fierce competition, even with low costs.