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The tie-ups between Jio and Airtel and Starlink were announced weeks after Prime Minister Narendra Modi travelled to Washington and met President Donald Trump and his key ally Elon Musk. (X/@narendramodi)

India’s rush to mollycoddle Trump’s oligarch raises many questions

Handing over commercial satcom services entirely to private sector has both security and market implications


Last week saw an unusual corporate development when two telecom giants and rivals, Jio and Airtel, rushed to announce tie-ups with Elon Musk’s Starlink for commercial satcom services without the latter having a license to operate or satellite spectrum to use. Worse, India hasn’t yet put in place a mechanism to govern this emerging new sector. The DoT and telecom regulator TRAI are currently preparing the ground rules.

Ironically, both companies have been fighting hard against the US giant over the allocation of satellite spectrum until recently. While Starlink is strongly in favour of administrative (non-auction) allocation, arguing that it is a “shared” resource, the Indian entities are for auctioning – in keeping with the practice after the Supreme Court’s 2G verdict of 2012 that mandated auction for all “natural resources”. The last time they openly clashed was at the TRAI’s open-house discussion on November 8, 2024.

Also Read: India’s tariff meltdown before US is beginning of a painful journey

Unusual tie-up

This tie-up is also unusual because both Jio (through its Jio Satellite Communication Ltd) and Airtel (through its OneWeb India Communication Pvt Ltd) received all-India commercial licenses (GMPCS) and also the clearances from the Department of Space (IN-SPACe) between 2021 and 2024 – while Starlink got the DoT’s ‘in-principal’ approval in 2024; its clearances from the IN-SPACe and home ministry (security clearance) are pending.

Another point to note.

The tie-ups were announced weeks after Prime Minister Narendra Modi travelled to Washington and met US President Donald Trump and his key ally Musk on February 13, 2025. This was the prime minister’s first direct engagement with Trump after the latter’s ‘reciprocal’ tariff threat. India is not only welcoming of Musk’s Starlink but also his Tesla cars (considering the lowering of tariff on automobiles from 110 per cent).

Appeasing US

The alacrity to appease Trump is obvious from Commerce and Industry Minister Piyush Goyal’s call to industry to “come out of their protectionist mindset” and his ministry directing exporters to identify areas where US goods could be chosen over Chinese imports – as the April 2 deadline for reciprocal tariffs approaches.

There are at least two precedents.

The first was when Musk announced his interest in launching Starlink and Tesla in India in June 2023, following a meeting with Modi. This led to a satcom war as Musk sought non-auction of the spectrum. Months later, in December 2023, the MeitY introduced the Telecommunications Bill of 2023 proposing the same — non-auction for satellite spectrum — which was seen as Musk’s victory.

On a platter

Days later, the Bill was passed without scrutiny of a parliamentary panel or debate in either House, amidst the pandemonium as 146 Opposition MPs had been suspended for asking the government to make a statement over the Parliament’s security breach. Before this, the National Digital Communications Policy (NDCP) of 2018 had introduced the concept of non-auction for satellite spectrum with the pleas of “streamlining administrative processes”, “liberalising the spectrum sharing” and “enabling light touch licensing/de-licensing of spectrum for broadband proliferation” etc.

The second was in April 2024 when the DoT gave ‘in-principle’ approval to Starlink – just ahead of another scheduled meeting between Modi and Musk but the latter flew to China instead.

Tweaking rules

The DoT and TRAI have been working together to put in place a non-auction mechanism (fixing frequency bands, pricing and other parameters) for satcom. The TRAI’s recommendations, released on April 24, 2024, supported Musk’s stand. It also issued three consultation papers (as the DOT kept adding new elements); the last one of September 27, 2024 sought fresh views of the telecom industry on various aspects of “administrative allocation” (non-auction) of satellite spectrum.

Also Read: Modi coming home hugged and happy, but Trump deal will need some work

Non-auction in itself wouldn’t violate the Supreme Court’s 2G verdict of 2012 though it had declared all such 2G spectrum allocations “wholly arbitrary and unconstitutional”. That is because, in a subsequent Presidential Reference, the court said auction might not be the only mean/method of spectrum allocation, but any other would attract “judicial scrutiny” because that “may be arbitrary and face the wrath of Article 14 of the Constitution”. So, non-auction of satellite spectrum would face a judicial scrutiny.

The above details lead to many questions about the way India frames and implements policies and the commercial interests being served therewith.

Why only conglomerates?

1. Why would India hand over commercial satcom services entirely to private conglomerates? Its national security implications can’t be understated: The US threatened Ukraine to cut-off the Starlink services to force it into a mineral deal just days ago. What would prevent the US from arm-twisting India, even if it is over commercial satcom (not military at the moment), in a crisis situation?

2. Why is India reluctant to bring forward public sector telecom entity BSNL into the satcom space? India has technological competence to launch its own satellites too.

Why duo-poly?

3. Why has Indian telecom space been reduced to effectively a duo-poly – with Jio (40.2 per cent) and Airtel (33.5 per cent) controlling 74 per cent market and the rest by Vodafone Idea (18.2 per cent) and BSNL (8 per cent)? Jio burst in with predatory pricing in 2016, with free call and data for the first 200 days and dirt-cheap rates for many years, killing competition and enfeebling competitors in the process. The Competition Commission of India (CCI) dismissed objections to Jio’s predatory pricing, arguing that Jio wasn’t a dominant player then. The TRAI had earlier allowed Jio’s “free and promotional services”; the TDSAT later ruled in favour by stating that no rules were violated.

Meanwhile, Indian government bailed out Vodafone Idea after it went bankrupt in 2022 – due no small measure to the subsequent upheaval in telecom market and other policy decisions. The presence of Vodafone and the now marginalised BSNL merely provide a façade for market competition.

Valid questions

4. Tecom officials’ argument for Starlink’s entry on the plea that it would plug “dark spots” (serve unserved remote areas) and MeitY and railway minister Ashwini Vaishnaw’s welcome message to Starlink on ‘X’ (which he later deleted) raise other questions. Why did the Universal Service Obligation Fund (USOF), set up in 2002 and renamed as Digital Bharat Nidhi (DBN) in 2023 precisely to plug such dark spots failed? Why has 49 per cent fund (Rs 79,145 crore of Rs 1.63 lakh crore collected) remain unutilised after more than two decades? Besides, given that Starlink’s satcom services would be prohibitively costly (due to high infrastructure investment), it is more likely to serve niche markets that would generate profits, rather than the unserved rural or remote customers which need plugging.

Why this path?

5. Do the swift tie-ups by homegrown billionaires with the world’s richest (Musk) point to a shift in India’s growth model or is it mere a continuation of the same? For the past decade, India has adopted a crony capitalist or ‘national champions’ model of growth and now appears poised to mollycoddle Trump’s oligarch. This may be to counter Trump’s reciprocal tariff threat – but that threat emerged from India’s own flawed protectionist trade and tariff policies.

The change, if any, is unlikely to alter the existing crony capitalist model – which former RBI deputy governor Viral Acharya asked India to “dismantle” in March 2023, specifically referring to “the Big 5” – the Reliance (owns Jio), Tata, Birla, Adani and Bharti (owns Airtel) groups – because they had grown too big in the past decade and profiteering by setting prices across industry, secured by India’s protectionist trade and tariff policies.

The entry of Starlink (also Tesla’s) and the rush of Jio and Airtel for tie-ups show the crony capitalist model is here to stay. That would be a bigger tragedy.
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