CNBC's Inside India newsletter: Musk’s India relationship moves beyond talk — but will it blossom?

Hello, this is Spriha Srivastava, CNBC International's enforcement editor, penning from London. This week, I look into Elon Musk's narration with India, wherefore it's yet moving from speech to action, and what's truly astatine stake.

This study is from this week's CNBC's "Inside India" newsletter. Like what you see? You tin subscribe here.

The large story

India has agelong been connected Elon Musk's radar. But for years, the narration mostly played retired successful headlines and half-starts.

Remember 2024? Musk was each acceptable to alert into New Delhi to conscionable Prime Minister Modi — until helium canceled astatine the past infinitesimal and popped up successful Beijing instead.

Anyway, let's instrumentality a measurement backmost here. Tesla signaled superior involvement successful the Indian marketplace backmost successful 2021, lone to shelve its plans erstwhile negotiations implicit import duties stalled. Starlink, Musk's outer net venture, started taking pre-orders successful 2021 but had to deed intermission aft regulatory hurdles forced the institution to contented refunds. For the amended portion of the past decade, Musk's India ambitions person remained conscionable that — ambitions.

That's yet starting to change.

The caller weeks person been absorbing for the Musk-India relationship. Tesla has opened its archetypal showroom successful Mumbai's Bandra Kurla Complex. Starlink has received the indispensable regulatory support to motorboat commercialized services successful India. And each of this comes conscionable weeks aft Musk publically distanced himself from U.S. President Donald Trump, marking a broader displacement successful his planetary strategy.

So wherefore the abrupt momentum?

At 1 level, India offers Musk a caller runway for maturation astatine a clip erstwhile his relationships successful China and the U.S. are becoming much complicated. For India's government, attracting concern from 1 of the world's astir high-profile entrepreneurs is simply a triumph that aligns perfectly with the country's "Make successful India" ambitions, peculiarly successful cleanable tech and integer infrastructure. But portion the headlines are eye-popping, the world connected the crushed shows things are conscionable successful the aboriginal stages.

Let's look astatine Tesla's existent presumption successful India. The thought isn't mass-market dominance, astatine slightest not yet. It's astir planting a emblem successful the premium segment. The Model Y, Tesla's astir fashionable car globally, has officially landed successful India, priced astatine astir 7 cardinal rupees (around $79,000). To enactment that successful perspective, India's best-selling cars typically outgo a fraction of that. India isn't a one-size-fits-all market. Alongside its immense value-driven market, a increasing luxury conception exists wherever planetary brands are fiercely competing for attention. BMW, Mercedes and Audi person been expanding their electrical conveyance offerings successful India, and Tesla has present joined the fray.

The Mumbai showroom is conscionable the archetypal step. India's caller argumentation model lowers import duties for companies consenting to manufacture locally. In fact, successful April 2024, Tesla reportedly began scouting locations for a imaginable EV mill successful India, with up to $3 cardinal successful investment. That would person marked a cardinal shift, perchance opening the doorway to much accessible EV models, boosting proviso concatenation enactment and creating caller jobs. But now, it's a dilatory build, not a sprint.

And past there's the charging challenge. EV adoption successful India differs from that successful the different markets. Two- and three-wheelers predominate the electric-vehicle landscape, and astir are charged astatine location utilizing modular outlets. That's wherefore India hasn't yet developed the sprawling nationalist fast-charging infrastructure you spot successful China oregon the U.S.

For Tesla's luxury buyers, though, fast-charging is non-negotiable. They expect convenience, and that means Tesla volition request to put heavy successful nationalist chargers, particularly successful cities specified arsenic Mumbai, Delhi and Bengaluru, wherever request volition apt concentrate. Tesla has begun hiring for these roles successful India, but establishing this web volition instrumentality time.

Alongside the EV push, Starlink's introduction into India could beryllium be tackling an wholly antithetic market: agrarian internet. Cheap mobile information has fueled India's net roar implicit the past decade, but agrarian areas stay underserved, peculiarly successful regions wherever laying fibre is costly and logistically challenging. Starlink's solution is to beam net straight from space, bypassing those hurdles.

But: outer net is not cheap. Starlink's work typically costs upwards of $100 per month, which is importantly much than what astir Indian consumers wage for internet. That suggests the existent play present is apt authorities contracts and partnerships with agrarian schools, healthcare providers and distant businesses that request connectivity careless of cost. Starlink is reportedly collaborating with telecom giants specified arsenic Reliance Jio and Bharti Airtel to administer its service, indicating a collaborative attack alternatively than a disruptive one.

The timing of each this is absorbing too. Musk's pivot to India comes conscionable aft his nationalist fallout with Trump successful June, pursuing disagreements implicit tariffs and subsidies. Whether those 2 things are straight connected is debatable, but the coincidence is hard to ignore. At the precise least, it's portion of a broader planetary diversification strategy for Musk, 1 that moves him further from the governmental entanglements of his U.S. relationships.

For Indian consumers, the accomplishment of Tesla and Starlink means caller technological options, though for now, these are chiefly targeted astatine the affluent and high-need agrarian segments. For investors, Musk's India play signals increasing assurance successful the country's semipermanent maturation story. And arsenic different planetary tech and EV giants ticker from the sidelines, Musk's occurrence could people the opening of a caller question of overseas concern successful India.

Musk has talked astir India for years. The quality this time? The groundwork is being laid. The adjacent fewer months volition amusement whether this is yet the commencement of thing lasting, oregon conscionable different section successful a complicated, stop-start relationship.

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In the markets

Indian markets were trading little connected Thursday.

The benchmark Nifty 50 was down 0.12% portion the BSE Sensex scale had declined 0.16% arsenic of 12:15 p.m. section clip (2:45 a.m. ET).

The benchmark 10-year Indian authorities enslaved output was marginally down astatine 6.308%.

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Coming up

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