Days after Tesla Inc.’s largest-ever round of layoffs and hours before quarterly earnings, Elon Musk will fly to India to squeeze in a meeting with Prime Minister Narendra Modi . It’s no idle period for Prime Minister Narendra Modi either, who is traveling across states to attend election rallies just days after the start of the world’s largest electoral polls as he seeks a third term.

The tight timeline for their meeting early next week highlights the huge stakes for both men. For Musk, India allowing SpaceX’s Starlink Inc. to operate in what is by far its largest market is a reward given China’s boycott of the U.S. company.

For Prime Minister Modi, the presence of Tesla cars on the streets of Delhi and Mumbai and the automaker’s potential investments in manufacturing will establish him as a leader who will bring significant foreign investment to India. Modernizing its cities into global metropolises and creating jobs.

“This is emblematic of the growing interest from foreign investors in India,” said Sonal Varma, chief economist for India and Asia ex-Japan at Nomura Holdings Inc. to capitalize on India’s growing domestic demand. “

This trip is likely to achieve breakthroughs on these two issues.

Starlink has received assurances from the government that it will begin operations in the country as soon as the third quarter of this year, according to people familiar with the matter. The person spoke on condition of anonymity because the information has not yet been made public. .

That would end a years-long stalemate with Modi’s government and help Starlink get closer to two local rivals that won licenses for Indian satellite internet services last year.

India’s transport ministry did not respond to an email seeking comment. Starlink did not immediately respond to a request for comment.

Tesla’s massive investment, on the other hand, will allow Musk to tap into India’s booming EV market and counter slowing demand for EVs elsewhere – as Musk spoke on a key earnings call on Tuesday At the time, this was a positive turn for the automaker. However, Tesla watchers want to see action on the ground after witnessing delays in previously announced projects like the massive Mexican factory.

Tesla has been trying to break into the Indian market for years, but Musk has repeatedly pointed to high import taxes as a hindrance. India last month reduced import taxes on electric vehicles for foreign automakers that have pledged to invest at least 41.5 billion rupees ($497 million) and start producing electric vehicles at local factories within three years.

Frost China

Although Starlink services have been launched in the United States, many European and Asian countries such as Japan, Malaysia and the Philippines, India and China have not yet approved it.

Even though Tesla is a big investor in China and Musk met with senior officials in Beijing and Shanghai during his trip last May and June, the Chinese government still refers to SpaceX services as a department of the Pentagon.

That’s why winning India – the only huge market with more than a billion people – is especially important for SpaceX.

Alex Capri, a researcher at the Hinrich Foundation in Singapore, said Operation Starlink would also mark a further deepening of the security partnership between India and the United States. The two countries, Japan and Australia, are cooperating in the Quad, a Washington, D.C.-led effort to counter Chinese influence.

He said the United States and India were “increasing surveillance in the Indo-Pacific region.” “Starlink definitely plays a role in that.”

checkered past

However, the company has a troubled past with the Modi government.

In 2021, the company suffered a setback when the Indian government required Starlink to stop selling subscription services to the public before applying for a license. The government has also asked it to refund subscription fees charged to customers.

Musk’s space business in India has struggled since then, in part because telecom service providers must have some local ownership. Musk has resisted similar regulations in countries including South Africa and Taiwan.

The first sign of a thaw came when the Modi government introduced a bill last year proposing to cancel the auction that allocates spectrum to companies providing satellite internet services. This is a favorable outcome for Starlink and OneWeb, which told the country’s telecoms regulator that they objected to bidding for satellite broadcasting.

Nomura’s Varma said satellite broadband services “are also in line with India’s digital priorities” and can better deliver on government projects.

Loose rules

India in February relaxed foreign direct investment rules in the space sector, allowing companies to invest in satellite and rocket makers without government approval.

Starlink still needs to resolve issues related to security approvals, spectrum allocation and pricing plans before it can begin operations in India. If that happens, Mukesh Ambani-controlled Reliance Jio Infocomm Ltd. and Sunil Mittal-backed OneWeb will Hard to compete. OneWeb is a subsidiary of the European telecommunications satellite company SACA.

The SpaceX unit has more than 5,600 active satellites in low-Earth orbit and plans to launch tens of thousands more as it aims to compete with telecommunications providers that use larger, higher-orbit satellites to hover over a location.

“Starlink has a major advantage,” Owen said. “It has the largest fleet of low-Earth orbit satellites deployed in orbit, covering most regions and providing connectivity services around the world.”