Elon Musk, the world’s richest person, the founder and CEO of Tesla Motors and several other companies is also active on Twitter. There, he isn’t shy to hold back on his opinions. His tweets have got him into trouble in the past, including fines from stock market regulators. Recently, on 13 Jan 2022, he responded to a Twitter user about why Tesla wasn’t in India yet. He said: ‘still working through a lot of challenges with the government.’
First off, it is remarkable for a CEO of a prominent, private company to publicly share their challenges with the Indian government. No prominent Indian company CEO would do it for instance, for fear of repercussions. Perhaps, one of the tests of being truly business-friendly is this: Can Indian business owners publicly share their genuine views on government policies? Given the rampant praise from our industry bodies after every budget that day still seems a bit far away.
Anyway, Elon’s refreshing freedom of expression isn’t the most remarkable part of the story here. What is more remarkable is that within days of his tweet, several Indian state government ministers wooed Elon on Twitter.
The first overture came from Telangana Industries’ Minister KT Rama Rao, who tweeted “Hey Elon, I am the Industry & Commerce Minister of Telangana state in India. Will be happy to partner Tesla in working through the challenges to set shop in India/Telangana. Our state is a champion in sustainability initiatives & a top notch business destination in India.”
Next up was Md. Ghulam Rabbani, state minister for Minority Affairs & Madrassah Education in West Bengal who wrote, “Drop here, we in West Bengal have best infra & our leader Mamata Banerjee has got the vision.” Clearly, this West Bengal government has come a long way since 2011, when Tata Motors had to leave Singrur for their Nano car project.
One day later, Jayant Patil, state minister for Water Resources in Maharashtra tweeted to the Tesla CEO, “Maharashtra is one of the most progressive states in India. We will provide you all the necessary help from Maharashtra for you to get established in India. We invite you to establish your manufacturing plant in Maharashtra.”
The same day Punjab Pradesh Congress President Navjot Singh Sidhu also tweeted, “I invite Elon Musk, Punjab Model will create Ludhiana as hub for Electric Vehicles & Battery industry with time-bound single window clearance for investment that brings new technology to Punjab, create green jobs, walking path of environment preservation & sustainable development.”
It will take a lot more than a few tweets for Tesla to come to India. There are a a lot of issues ranging from duties, manufacturing, regulations, taxes, battery recharge network before the electric car company can set-up a business here. Most of these issues are to be resolved at the central government level, which is led by the BJP. (Worth noting that all the state ministers inviting Elon were from non-BJP state governments).
Also, Elon’s tweet aside, entering India now may not even be Tesla’s strategy. Tesla cars are expensive, limiting their demand in India. For now, Tesla probably can’t even make cars fast enough to serve their existing markets. Tesla’s near-autonomous driving capabilities, a key feature, maybe challenging to be optimally utilized in India. These boring realities may better explain why Tesla isn’t here yet (though it will surely be here one day.)
What is interesting, however, is that a private foreign company’s foreigner CEO is no longer a political untouchable. Quite to the contrary, a politician seen as engaging with the leading global CEOs, inviting them to set up base, invest and create jobs locally is seen as a positive for the politician. Why else would state level ministers, across parties and political ideologies publicly tweet to Elon Musk?
Does this mean a significant, if not tectonic shift in Indian politics towards private, foreign entrepreneurs? Is the foreign-white-evil-capitalist stereotype now (thankfully) truly gone? One surely hopes so.
For this is not the first time Elon Musk has tweeted about issues in India. Nearly four years ago, in May 2018 as well, Elon tweeted “Would love to be in India. Some challenging government regulations, unfortunately. Deepak Ahuja, our CFO, is from India. Tesla will be there as soon as he believes we should.”
None of of the wooing from the state ministers happened then. It is then only a recent phenomenon that Indian politicians can and should be seen as inviting large, prominent companies from all over the world to create jobs locally. Twenty years ago, a politician publicly reaching out to a foreign CEO would be blasphemy. Today, it is cool.
The courtship by several states also shows something that could benefit India – positive, competitive federalism. The various states of India should compete in being more business friendly. This will lift the overall business environment in the country and make India a better manufacturing destination for the world. China’s questionable Covid-zero policies are causing major logistical problems. Shipments from Chinese factories are taking several months longer to reach their destinations, due to Covid restrictions and frequent lockdowns in China. It is a golden, once in a century opportunity for India to quickly do what it takes to be seen as an alternative manufacturing base.
Of course, the states can only do so much. The centre too must work in tandem to make this happen. Customs, tolls, ports, tax returns, GST filings, licences, land acquistions and labor laws, every aspect has to be made world-class and obstacle-free for global manufacturing to seamlessly shift to India.
This isn’t just about Elon or Tesla or political showmanship on twitter. It is about using a) the Covid generated opportunity of India becoming an alternative global manufacturing hub and b) leveraging this new Indian public sentiment – that politicians engaging with leading global corporations is good – to create a far more prosperous India. Maybe Elon’s tweet, and the invitations that followed is indeed a sign of changing times for India after all.