Modi fanboy Musk to bring Tesla and Starlink to India

• Modi’s first state visit to the US led to Tesla agreeing to return to India, this time for a more significant investment.
• Musk also hinted at possibly introducing rural Indians to Starlink.

For Indians, having Tesla manufacture its vehicles in the country is something they’ve hoped for for a long time. While Elon Musk, the CEO of Tesla has indicated in the past that there are plans to invest in a Gigafactory in India, the Indian government and the American EV maker fell into a deadlock in 2022. However, the situation is now very different. 

Narendra Modi, the Prime Minister of India had a meeting with Musk in New York. The Prime Minister is in the US for a three day official visit. The meeting concluded with his country bagging investment plans from Tesla and Starlink.

“I am confident that Tesla will be in India, and we will do so as soon as humanly possible,” Musk told the press after he met with Modi on June 20. Modi’s trip to the US is also his first state visit during his nine-year-long reign serving as the Indian premier. With his visit, Modi is scheduled to meet CEOs, Nobel laureates, economists, artists, scientists, scholars, entrepreneurs, academicians, and health sector experts, local Indian reports indicated.

“I am planning to visit India next year. I would like to thank PM Modi for his support, and hopefully, we will be able to announce something in the future. It is quite likely there will be a significant investment in India,” Musk highlighted, adding that he had an excellent conversation with the Prime Minister.

What was the issue with Tesla in India before this?

Since 2016, Tesla has been trying to enter the Indian market with initial plans to start selling and servicing vehicles and eventually move to produce cars locally. In fact, by 2020, Tesla had started testing the Model 3 & Y in the country. The EV maker also started setting up a research facility there, which sparked a lot of excitement about the prospects of Tesla in India. 

However, Tesla’s plans in India reached a dead end when the EV maker moved its Indian team out of the country in 2022 and transitioned them to the Middle East. The reason behind that move is that for Tesla to sell vehicles in India without incurring significant tariffs, the EV maker will need to either source 30% of parts for the vehicle from India or do final assembly there.

For the longest time, even India has been courting Tesla to build the next Gigafactory there. After all, the subcontinent, with over 1.3 billion people and a commitment from the government to transition to sustainable energy, seems almost perfect as the location for Tesla’s following factory.

Fortunately, according to a PTI report, Tesla executives met with government officials on May 17 this year, offering to set up Tesla’s Gigafactory in the country with a fresh approach towards previous differences and the intent to export EVs across the continent from India. 

Is 2024 the year of Tesla and Starlink in India?

After meeting Modi, Musk also shared that he was invited to visit India next year. Musk, who also heads SpaceX, said he looks forward to bringing Starlink to India. “The Starlink Internet […] can be incredibly helpful for remote or rural villages where they either have no access to the Internet or the Internet is very expensive and slow.”

Reiterating the plans to have Tesla invest in India, Musk said he is hopeful to be able to “announce something in the not-too-distant future.” While the Tesla chief did not intend to “jump the gun” on an announcement, he said, “it is quite likely that it will be a significant investment in our relationship with India.”

From China to India

The Indian Prime Minister is also expected to meet with President Joe Biden. According to a report by CNBC, high on the agenda will be deepening of defense ties, partnerships in technology and India’s role in the Indo-Pacific. Ties between India and the U.S. are at a turning point and the relationship between the two nations has improved in the last decade.

Modi is also expected to meet other CEOs, including Apple’s Tim Cook, Google’s Sundar Pichai, Microsoft’s Satya Nadella and FedEx’s Raj Subramaniam at the White House state dinner. The growing partnership between India and the U.S. also gives room for the two nations to adopt a “China plus one” strategy and push more technology companies to set up operations in India, analysts told CNBC.

The U.S.-India initiative on Critical and Emerging Technology was announced in May last year. The iCET initiative aims to “elevate and expand” the two countries’ technology partnership and defense industrial cooperation, the White House said in January.

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