Elon Musk’s satellite internet venture, Starlink, this week signed successive cooperation agreements with India’s two telecom giants, Reliance Jio and Bharti Airtel—unlocking access to the world’s largest emerging internet market.
This breakthrough could not only reshape the competitive dynamics of India’s telecom sector, but it also underscores a deeper layer of U.S.–India economic maneuvering. While the Trump administration was busy brandishing tariffs, India’s decision to embrace Musk represents both a pragmatic technological compromise and a pledge of geopolitical allegiance.
A Dramatic Turn from Confrontation to Alliance
Between March 12 and 13, Reliance Jio—controlled by India’s richest man, Mukesh Ambani—and Bharti Airtel, the nation’s second-largest operator, announced that they would distribute Starlink equipment nationwide and offer accompanying services, particularly in remote regions where fiber-optic networks fall short. Previously, these local giants had united to bar Starlink’s entry, insisting that the government allocate satellite spectrum through auctions rather than via administrative assignment, thereby attempting to use their financial might to block the foreign entrant.
This standoff lasted for three years. Since 2021, SpaceX repeatedly attempted to sell Starlink services directly in India, but its lack of a local partner triggered regulatory concerns. The Indian Ministry of Communications even halted its pre-sales, emphasizing that foreign firms must operate critical infrastructure through an “Indian agent.” Meanwhile, in its bid to secure satellite internet supremacy, Ambani’s Reliance Jio invested $19 billion in a spectrum auction and forged a partnership with European satellite company Eutelsat OneWeb.
The turning point came at the end of 2024. Following a meeting between Prime Minister Narendra Modi and Musk in Washington, the government abruptly announced that satellite spectrum would henceforth be allocated through administrative assignment. Within three months, the positions of the two telecom giants underwent a complete reversal. Analysts suggest that the regulator’s decision to limit the spectrum license to five years—rather than the twenty years advocated by Starlink—forced Musk into a collaborative stance, while domestic operators, facing U.S. trade pressures, saw Starlink’s technology as a means to bolster rural connectivity.
The Interplay of Political Bargaining Chips and Technological Ambition
On the surface, the deal appears mutually beneficial: Starlink can mitigate policy risks by leveraging the established distribution networks of local players, while Jio and Airtel secure a technological counterweight against China’s offerings, such as its Guowang satellite system. Yet, a deeper impetus lies in the nuanced interplay between Washington and New Delhi.
Musk’s close ties with Trump proved pivotal in unlocking the Indian market. The SpaceX founder contributed hundreds of millions to Trump’s campaign and played a significant role in shaping policy after Trump’s re-election. When Trump repeatedly threatened retaliatory tariffs on India—originally slated to take effect on April 2—the Starlink agreement emerged as a strategic tool to ease trade tensions. Aditya Ramanathan, a researcher at Bangalore’s Takshashila Institution, noted that the Indian government now regards SpaceX as a quasi-official American entity, with the cooperation amounting to a political transaction.
This arrangement is driven by several considerations. First, India must balance its technological reliance on China, with Starlink offering an alternative to China’s Guowang satellite system. Second, American companies tend to be more accommodating of India’s frequent internet regulation measures. Third, unresolved negotiations over Musk’s Tesla electric vehicle factory could benefit from Starlink’s entry, potentially paving the way for larger-scale investments. Notably, in tandem with the Starlink deal, U.S. cryptocurrency exchange Coinbase unexpectedly received regulatory clearance in India—underscoring a broader breakthrough for companies aligned with Trump’s camp.
Market Reshuffling and Underlying Risks
Although the cooperation announcement triggered a sharp drop in the shares of India’s telecom tower operators, Starlink is unlikely to disrupt the existing market structure in the short term. Jio and Airtel together command 80% of the Indian mobile data market, and their collaboration essentially integrates satellite services into their own offerings rather than allowing Starlink to operate independently. This arrangement suggests that Musk may ultimately serve as a technology supplier to local giants rather than emerging as a direct competitor.
Cost remains the foremost obstacle. Starlink equipment is roughly ten times as expensive as local broadband terminals, and even the most basic service plan commands a monthly fee of 3,000 rupees (approximately $34.50)—a price far beyond the reach of a nation where the per capita GDP hovers around $3,000. Mumbai-based broker Ambit Capital has warned that without government subsidies, Starlink stands little chance in a price war. Furthermore, the regulator’s insistence on re-evaluating spectrum pricing after five years injects additional uncertainty into long-term investments.
A deeper concern centers on national security. Jairam Ramesh, a spokesperson for the opposition Congress party, questioned who would ultimately control the on/off switch for Starlink services in the event of a border conflict or domestic unrest. Such worries hark back to Ukraine, where SpaceX’s unilateral adjustments to network services in conflict zones exposed the risks inherent in vesting critical infrastructure in a private enterprise.
The fissures in the Indian market are already evident. While spectrum re-pricing in five years might eventually provide Starlink with a more favorable operating environment, the battle in India is far from over for Musk. Tesla’s plans for an electric vehicle factory remain stalled amid tariff negotiations, and the Starlink deal still awaits final regulatory approval. Nonetheless, the world’s richest man has demonstrated his ability to convert political capital into commercial advantage—when technological prowess is intertwined with geopolitical interests, pure commercial logic can give way to the imperatives of power.