Starlink Deal | India’s goodwill hunting may be completely off the mark

It won’t matter how successful Starlink is in India, unless Donald Trump finds markets for agricultural exports in India and elsewhere, or creates millions of new jobs in manufacturing. Till then, the tariff pressure on India will continue.

To demonstrate their alignment with US geopolitical and economic interests many countries are hoping to leverage business deals with Starlink’s satellite Internet service. They now include India where two of its biggest Internet providers have inked a deal with Elon Musk’s Starlink.

The synergy between Musk’s tech and US geopolitical interests was most recently evident in Ukraine, when Musk’s veiled threat on his social media platform to turn off Starlink, which he described as the "backbone of the Ukrainian army", may have nudged Ukraine to mend fences with the US.

Remarking on the unfairness of Musk using his tech clout to disrupt Ukraine’s defence, Polish foreign minister Radoslaw Sikorski pointed out, “Starlinks for Ukraine are paid for by the Polish Digitization Ministry at the cost of about $50 million per year. …The ethics of threatening the victim of aggression apart, if SpaceX proves to be an unreliable provider we will be forced to look for other suppliers."

India has yet to decide whether it will integrate foreign private sector technologies such as Starlink services in its national security infrastructure. However, once the Starlink service gets a foothold in India, it is difficult to say how its usage will spread.

Japan, which started using Starlink in 2022, is struggling with how to develop a joint regulatory framework with other industrialised countries which could guide the behaviour of companies that have a great influence in advanced technologies. Bangladesh, on the other hand, is eager to embrace Starlink without wondering about its security and geopolitical consequences.

Without a clear regulatory framework for such dual-use technologies, it is legitimate to ask questions about their impact on sovereignty, dependence on corporate entities, and the ethical implications of foreign policy entanglements with foreign companies and individuals like Musk.

Indeed, these are the questions that the Opposition has started to ask. Jairam Ramesh of the Congress thus wanted to know, “Who will have the power to switch connectivity on or off when national security demands it? Will it be Starlink or its Indian partners?

Perhaps in anticipation of such criticism, on the very day that these questions were raised, an unnamed source informed the media that the Centre was setting “tough conditions” for Starlink’s India entry. Starlink is being asked to set up a control room in India to enable the suspension or shutdown of communication services and the security establishment has apparently “specified mandates to allow call interception by law-enforcement authorities through official channels when the need arises”.

Ramesh asked another pertinent question, “Will other satellite-based connectivity providers also be permitted and on what basis?” The Chinese state-backed SpaceSail, and Project Kuiper financed by Jeff Bezos are among some other satellite-based connectivity providers. A global auction for satellite spectrum would have yielded a fair market price. However, spectrum allocation seems to be moving towards administrative allocation as Starlink desired.

The Opposition has also pointed out that any administrative allocation of spectrum to a private player, would be a violation of the law of the land. In the 2G case, the Supreme Court had held that spectrum was a scarce resource and could be allocated only through an open and transparent auction. Administrative allocation is exclusively reserved for strategic uses such as defence and ISRO operations.

One only needs to recall that two former cases of administrative allocation of scarce resources by previous governments turned into political scandals benefitting the Bharatiya Janata Party (BJP) — the coalgate and 2G scams (licences given at throwaway prices on first-come-first-served basis).

Strangely, the Narendra Modi government in 2024 moved the Supreme Court seeking exceptions for administrative allotment of spectrum in exceptional cases but its plea was denied. It was then pointed out by government sources that the Telecom Act 2023 allows administrative allotment of spectrum in 19 cases, including satellite spectrum.

Perhaps it was the inevitability that spectrum allocation to Starlink would be done through administrative allocation that prompted Airtel and Jio to join hands with Musk by becoming its distributors. As Starlink aligns its interests with that of its Indian partners, it can navigate the intricate regulatory environment in India and position itself favourably in terms of tariff negotiations and market dynamics. In a win-win deal, Starlink’s Indian partners will be able to operate as a cartel by joining hands with it.

Ramesh has alleged that “these partnerships have been orchestrated by none other than the PM himself to buy goodwill with President Trump through Starlink owner Elon Musk.”

Several indicators suggest this — although the success of a strategy of bowing to the interests of Trump’s adjutant remains uncertain. Modi’s visit to the White House to congratulate Trump on his election, could be understood as either appeasement or as a proactive stance to ward off tariff threats. Either way, it brought little immediate relief with Trump dubbing India “tariff king” and threatening reciprocal tariffs.

The visit also saw the entire Indian security and foreign policy establishment publicly genuflecting to Musk, and his family, with Prime Minister Narendra Modi bearing gifts for Musk’s children. The sycophancy seemed suited to a situation where power differentials between the supplicant and the patron were perceived as being huge.

Is the Starlink deal and the possible entry of Tesla, likely to mitigate US tariff pressure? India’s attempt to go goodwill hunting may be completely off the mark.

Trump’s tariff threats aim to back the interests of not Musk so much as the interests of his constituency, especially in the larger agricultural red states, and to fulfil his promise of bringing back manufacturing jobs.

With US agricultural goods exports being targeted with enhanced tariffs by China, it won’t matter how successful Starlink is in India, unless Trump finds markets for agricultural exports in India and elsewhere or creates millions of new jobs in manufacturing. Therefore, the tariff pressure on India will continue.

The push to capitulate is already indicated by Commerce Minister Piyush Goyal’s statement calling on Indian industry to shed its “protectionist mindset”. That the mood is to give concessions to the US instead of tough and strategic negotiations was also underlined by his advice to industry to identify areas where US goods can be chosen over Chinese products.

Trump’s statement on the heels of Goyal’s visit to the US that New Delhi had agreed to "cut their tariffs way down" suggests that despite formal denials, India has already made a decision to fall in line.

The Starlink deal, meanwhile, shows India’s inability to navigate the intersection of technology, commerce, and geopolitics that the Musk company represents — except by giving in far too quickly.

(Bharat Bhushan is a New Delhi-based journalist.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.