Elon Musk, the Tesla Chief, announced on the social media platform ‘X’ that he will be visiting India in April and meeting with Prime Minister Narendra Modi. The timing of his visit is as significant as the investments he is likely to announce for India. Musk’s visit comes in the middle of the election season—the first phase of polling will be underway when Musk gets here. The first phase is scheduled for April 19th -with 21 states and union territories going to polls. The expectation is that Musk will likely announce Tesla’s investment plans in the country, its plans for India, and the establishment of a new factory. This meeting is the culmination of several meetings and negotiations going on for several months.
Besides giving India a boost as an investment destination and the signaling effect it will have on investors worldwide looking to explore manufacturing destinations beyond China, it is also a clear endorsement of Prime Minister Modi’s third term.
Mr Musk is convinced that Mr Modi is coming back to power. The typical norm has been to hold off on big investment plans until a new government has been formed. This period of transition has rarely been associated with hectic economic activity. Domestically, too, in the past, companies have resorted to the wait-and-watch mode and steered clear of announcing big projects. Policy certainty has been one of India’s handicaps in the past; this visit, before the election results and formation of a new government, is also a message that the world outside perceives Mr Modi as someone who will continue to lead India and steer policies.
It is also an endorsement of Mr Modi’s economics. Prime Minister Modi had pitched himself as someone who is a staunch practitioner of minimum government and maximum governance. He has been at the forefront of driving reforms like the Insolvency and Bankruptcy Code, clearing up balance sheets of banks, introducing GST, announcing a slew of incentives to boost manufacturing capabilities in the form of Production Linked Incentive Schemes, land and labor reforms, doing away with redundant laws for ease of doing business, bringing in off-budget borrowings on to the budget signaling transparency and greater credibility to the budget numbers, the building of roads and highways at a break-neck speed that India has ever seen, governance reforms driven by India Stack – experts have said that in terms of digital inclusion India is a developed country.
It’s also an endorsement of how India is positioning itself, the vision of Aatmnirbharta (Self-reliance)and Viksit Bharat (Developed India) being pitched through the decade that PM Modi has been in power that India means business and will roll out the red carpet for investors -but even as it woos investors it will continue to watch out for interests of the marginalized and small businesses. This is the message that has gone out from across all quarters of the government -from Smriti Irani, the Women and Child Development Minister, who pitched the India story at the World Economic Forum earlier this year to the Commerce and Industries Minister, Piyush Goyal, who has iterated on several occasions that watching out for interests of the small and medium players is of paramount importance. The messaging has been sharp and uniform.
POLITICS OF HOPE VS DESPAIR
Mr. Modi’s campaign has been largely about politics of hope, development, and aspiration. Mr Gandhi’s rallies have been cynical of the Indian growth model.
Mr Rahul Gandhi, leader of the opposition Congress party has largely veered towards an attack on capitalism -he has often named key business leaders of the country not as job or wealth creators but as those who seem to have unduly benefited from the ruling party. Mr. Gandhi’s latest promise on “wealth redistribution”.
At a recent rally, Gandhi, the scion of the Gandhi dynasty, promised that if the Congress is voted to power, the party would survey to run a check on who possesses the wealth of the country and undertake an exercise to redistribute the same.
“First, we will conduct a caste census to know the exact population and status of backward castes, SCs, STs, minorities, and other castes. After that, the financial and institutional survey will begin. Subsequently, we will take up the historic assignment to distribute the wealth of Indian jobs and other welfare schemes to these sections based on their population, Mr Gandhi was cited as saying.
Rajeev Mantri, a venture fund manager and author of New Idea of India, lamented that the rhetoric from the opposition parties is “toxic and damaging”. In an interview with Moneycontrol, he said that if such a measure is implemented, it could take India’s development trajectory by three to four decades. This is parallel to what happened in China under Mao Zedong when redistribution policies were implemented, and it took over three decades of consistent work to pull China out of economic decay.
Mr Musk’s visit also underlines the fact that the narrative being set by Mr Gandhi, which is heavily influenced by the left economic model is not finding any takers within the country or in the world. India has pressed the reset button, shedding years of socialist politics, it is turning towards a model of development driven by Industry and enterprise- India is in the global spotlight as a startup hub. There has been a sea change in the aspirations of young India -entrepreneurship That this is India’s moment – from its demographic dividend, talent, the right policies to enable investments, and as Nilesh Shah, member PMEAC and Managing Director of Kotak Mutual Fund put it “the fastest growing democracy in the world.” And that’s what Mr Musk is betting on.
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