Musk Clears Final Hurdles for Tesla and Starlink in India

In the span of a week, two of Elon Musk’s companies, Tesla and SpaceX, hit milestones in India, a country that the billionaire tech entrepreneur has been trying to crack for years.

On July 9, after a three-year process, Starlink, his satellite broadband venture that is a subsidiary of Space X, cleared the final regulatory hurdle to start commercial operations.

And on Tuesday, India’s first Tesla showroom opened in Mumbai, marking the first time Indian consumers can buy the electric cars.

Experts said the developments are signs of progress for Mr. Musk’s efforts to enter India, a country led by Prime Minister Narendra Modi, with whom Mr. Musk has a complicated relationship. Mr. Musk’s social media company, X, is suing the Indian government over a claim that it misused the law to block content on the platform — even as the two leaders have met often to talk business.

The approval of Starlink is particularly significant. Some 600 million Indians do not use the internet, and even a subsection of those people would represent a significant potential market.

Starlink overcame the last regulatory barrier to setting up its business by winning a license from the Indian National Space Promotion and Authorisation Centre.

The company will still need to develop physical sites on the ground with technology to connect to satellites, said Varun Gupta, a senior analyst specializing in broadband at Counterpoint Research.

Starlink will also need to comply with India’s data localization provisions, Mr. Gupta said.

For example, Starlink will have to store the data it collects in India, so the Indian government will have access to it for national security reasons, and allow the Indian government and law enforcement agencies to suspend or shut down internet services when requested.

Starlink’s bigger challenge, Mr. Gupta said, may be deciding where to roll out the technology. While some analysts suggest that Starlink’s comparative advantage might be in India’s rural areas, where there are lower rates of broadband access and a clear line of sight to the sky, Mr. Gupta noted that those areas may not have enough of a consumer base.

So Starlink might focus instead on semi-urban areas, where Mr. Gupta said growing numbers of people are working remotely and require multiple connections to the internet.

Reliance Jio and Bharti Airtel, two of India’s biggest telecom players, signed deals with Starlink in March to help bring to service to India, pending government approval.

Separately, on Tuesday, Tesla opened its first Indian showroom, in Mumbai’s Bandra neighborhood.

Eliot Pence, the chief business officer of Osmo and a frontier markets expert, called the showroom “symbolically important, commercially insignificant.”

Mr. Musk did not attend the Mumbai Tesla opening — a contrast to the way Apple opened its own showroom in the Bandra Kurla complex, in Mumbai’s central business district, at an event where Tim Cook, the company’s chief executive, opened the doors to the store and personally greeted customers.

Mr. Musk’s efforts to sell cars in India had been previously delayed by high import duties on cars by the Indian government, and those measures have not been removed. Experts said the decision to open a showroom in India despite this could be a bet that the Indian government will eventually lower tariffs, or a belief that enough people will choose to buy a Teslas as a premium product.

Those duties, however, may keep Teslas far out of reach for most Indians.

Because of the import duties and a luxury tax, the Model Y Tesla will be available in India starting at around $70,000 — compared to its starting price of $44.990 in the United States. Other electrical vehicles sell for under $25,000 in India.

Pravin Krishna, an economist at Johns Hopkins University who specializes in India’s economy, visited the Tesla Experience Centre on Thursday. He said the premium price may limit Tesla’s future in the country.

The Tesla’s high price, at least in the short run, Mr. Krishna said, could limit the limit sales which in turn would likely limit the building out of the charging infrastructure the cars need.