"Immense Potential For...": PM Modi, Elon Musk Speak Amid US-China Trade War

Prime Minister Narendra Modi and tech billionaire Elon Musk spoke today about a US-India partnership in the areas of technology and innovation. The two leaders, who had met in Washington earlier this year, took forward their discussion, including about Mr Musk's auto and tech firms - like Tesla and Starlink - investing in India.

There is "immense potential" for collaboration between India and the United States in these fields, PM Modi said, adding that India remains committed to advancing a partnership between New Delhi and Washington in these domains.

"Spoke to Elon Musk and talked about various issues, including the topics we covered during our meeting in Washington DC earlier this year. We discussed the immense potential for collaboration in the areas of technology and innovation. India remains committed to advancing our partnerships with the US in these domains," PM Modi wrote on his social media handle on X - another firm owned by Elon Musk.

TIMING OF THE PHONE CALL

The phone call between PM Modi and Elon Musk comes at a time when the United States and China are engaged in a fierce trade war, with either country imposing punishing tariffs on the other - 245 per cent on all Chinese exports to the US and 125 per cent retaliatory tariff over and above its previously existing 67 per cent tariff by China on all US imports.

These tit-for-tat reciprocal and retaliatory tariffs have had a severe impact on industry, since China and the United States are the two largest manufacturing nations globally. Most of America's top tech firms manufacture a vast majority of their products in China, and tariffs have sent tech sector bosses searching for alternate destinations to manufacture their goods.

India, which has an established manufacturing sector in the tech and auto industry, and faces 26 per cent reciprocal tariff imposed by President Trump, is now being seeing as a favourable alternative for tech firms to gravitate towards. For Elon Musk's Tesla, the story is no different.

TESLA'S JOURNEY IN INDIA

Tesla has not officially ventured into the Indian market yet, but shortly after a meeting between PM Modi and Elon Musk in Washington in February this year, Tesla Inc, the EV manufacturer focusing on renewable energy, had commenced hiring in India. The brand had posted 13 openings on LinkedIn for various roles, including back-end jobs and customer-facing roles.

In the past, Tesla and India have had an uncertain relationship with the brand delaying its entry into the Indian passenger vehicle market. The major concern for the EV manufacturer has been the high import duties. However, the Indian government addressed the concerns in March last year with reductions in the import duty on electric vehicles. This change came with conditions. For instance, the companies are required to set up local manufacturing facilities with a minimum of $500 million in investments.

In the Union Budget 2025, India reduced basic customs duty (BCD) on high-end cars with a price tag of more than $40,000 from 110 per cent to 70 per cent. This was seen as an invitation for manufacturers like Tesla.

But after April 2, 2025, when President Trump announced reciprocal tariffs on nations that tariff US goods "unfairly", a retaliation by China soon spiralled into a trade war between the two largest economies. Each nation outdoing the other over a series of punitive taxes on imports from the other.

The impact of these tariffs sent shock waves through the manufacturing and logistics sector, including the automobile and technology sectors. Entrepreneurs like Elon Musk, who put all their eggs in the China-basket now face an uncertain future in terms of exports out of China.

STARLINK COMING TO INDIA?

Elon Musk, who openly calls himself a "big fan" of PM Modi, has ambitious plans for his Starlink satellite internet service to come to India, a country that leads the world in internet consumption, and is the biggest global market for social media and fintech sectors.

However, Starlink's entry into India has faced regulatory challenges, security concerns, and opposition from domestic telecom giants like Mukesh Ambani's Reliance Jio.

In November last year, India's telecoms minister, Jyotiraditya Scindia, stated that Starlink had yet to comply with security norms, and a license for satellite communications services would only be issued after meeting all requirements.

Elon Musk has criticised India's policy of granting spectrum for satellite services through auctioning, but the Indian government later changed its policy, deciding to assign satellite spectrum instead of auctioning it.

India's satellite broadband service market is highly competitive, with at least six companies controlling the market, led by Ambani's Reliance Jio and Sunil Bharti Mittal's Airtel.

More than 7,000 active satellites of Mr Musk's Starlink are orbiting Earth, providing low-latency broadband to some 4.6 million people worldwide. However, if Mr Musk wants to enter the Indian market - with more than a billion internet active internet connections daily, Starlink's high pricing could become an issue. India currently has one of the cheapest rates of mobile data globally.