Elon Musk is preparing to introduce his innovative businesses, Tesla and Starlink, to India, but he is encountering well-known obstacles: strict laws and fierce local competition. However, Musk might be in a better position to negotiate a route for his companies in India now that Donald Trump has been re-elected as president of the United States. Would Musk be able to enter one of the biggest marketplaces in the world with Trump’s backing? Let’s investigate the matter.
Credits: Latestly
Tesla’s Long Road to India: Import Duties and Local Opposition
Elon Musk’s vision of launching Tesla in India has long been hindered by high import duties. The Indian government imposes import tariffs of up to 100% on fully assembled electric vehicles, an effort aimed at encouraging local manufacturing and reducing dependency on imports. This tariff makes Tesla’s cars prohibitively expensive for Indian buyers unless the company establishes a manufacturing facility within the country. Musk had planned to launch Tesla in India a few years ago but had to stall those plans as import costs became a major deterrent.
In addition to the government’s stance, Indian automakers like Tata Motors and Mahindra & Mahindra have expressed concerns over any potential relaxation of import duties specifically for Tesla. These companies argue that if Tesla gains concessions, it would undermine local efforts in the electric vehicle (EV) sector, where they are investing heavily. Tata and Mahindra have been vocal about promoting “Make in India” for the EV industry and consider Tesla’s entrance a competitive threat. Thus, the road for Tesla in India is filled with obstacles.
The Push for Local Manufacturing: India’s Negotiations with Musk
India has been aggressively pursuing Musk to establish local manufacturing in spite of these obstacles. The advantages of setting up a Tesla factory in India, including as access to one of the fastest-growing EV markets and advantageous incentives for domestic production, have been emphasized by Prime Minister Narendra Modi and his staff in recent talks. According to reports, Musk was supposed to travel to India early this year to complete an agreement to establish a manufacturing plant. This would be in line with India’s objectives of investing in sustainable technologies and creating jobs.
India has shown signs of flexibility, even lowering import duties for foreign automakers that commit to local manufacturing. However, a definitive agreement with Tesla has yet to be reached. With Trump back in office, Musk may have an added advantage in securing favorable terms, as Trump’s administration is known for its strong pro-American business stance.
Credits: Zoom News
Starlink’s Battle for the Skies: Lowering Entry Barriers for Satellite Broadband
While Musk’s satellite broadband provider, Starlink, is trying to take over the skies in India, Tesla is facing difficulties on the ground. Using low-Earth orbit satellites, Starlink seeks to bring inexpensive internet access to underserved and rural areas, but the Indian telecom industry has opposed the plan. In contrast to what typical telecom companies pay, the business has asked India’s telecom regulator to charge a small yearly revenue fee for spectrum usage of 1%.
This proposal has sparked opposition, notably from Reliance Jio, a dominant player in India’s telecom industry. Reliance Jio sees Starlink as a direct competitor to its broadband services, fearing it could disrupt India’s traditional telecom market. With Trump’s renewed support for American enterprises, Starlink could push harder for regulatory concessions, positioning itself as an essential solution for India’s rural connectivity needs.
Trump’s Influence: Could Political Ties Help Musk’s Mission?
Experts speculate that Musk’s alignment with Trump could play a role in advancing his Indian ambitions. “So far Musk was just another businessman from the US. Now with Musk playing a key role in getting Trump re-elected, the equation has changed,” noted an industry observer. Trump’s administration has consistently championed American business interests, and Musk may leverage Trump’s support to gain an edge in negotiations with the Indian government.
Musk’s influence in Trump’s “A team” might make him more than just another CEO to Indian regulators. This could allow him to push for more favorable conditions and counter resistance from local players. According to business strategist Lloyd Mathias, “Given the sheer share of effort Elon Musk put into Trump, we can expect a smooth passage for his companies, including Tesla, to India.”
