Will Elon Musk Test the South Asian Market?

Welcome to Foreign Policy’s South Asia Brief.

The highlights this week: Billionaire entrepreneur Elon Musk meets with Sri Lanka’s president in Bali, the United States issues travel restrictions on a former Bangladesh Army chief for alleged corruption, and South Asian governments mourn Iranian President Ebrahim Raisi.

Elon Musk Eyes South Asia for Starlink

Sri Lankan President Ranil Wickremesinghe met billionaire entrepreneur Elon Musk at a conference in Bali last Sunday, where they spoke about Musk’s Starlink satellite internet service, which he is launching in Indonesia. “Starlink’s expansion could be particularly transformative for countries like Sri Lanka,” Wickremesinghe said in a post on X after their meeting.

Musk is aggressively marketing Starlink around the world: He says that the service is now available in 99 countries. (In 2021, that figure was just 14.) It isn’t yet available in South Asia, which is an especially attractive market due to its large and young population, its emerging technology sectors, and government pledges to ramp up digital economies. But financial, legal, and logistical constraints pose challenges that could hurt Starlink’s prospects in the region.

In the last few decades, internet penetration rates increased rapidly across South Asia. India and Pakistan rank in the world’s top 10 countries for total internet users. However, this masks the massive number of South Asians—989 million people, including more than 683 million in India—who remain offline. Only 47 percent of South Asia’s total population uses the internet, according to DataReportal.

This presents an opening for Starlink, especially given that the service’s low-orbit satellites are intended to reduce connection problems and better serve remote regions, which Musk describes as a key investment target. Despite rapid urbanization in recent years, most of South Asia’s population remains in rural areas.

But Starlink faces multiple challenges making inroads in South Asia, mainly because the service’s drawbacks will be especially glaring there. First, Starlink isn’t cheap: In Indonesia, it’s more than twice the average cost of internet service. In South Asia, recent inflation has resulted in sluggish private consumption growth, including within well-performing economies like India. Many won’t want to pay for Starlink.

Additionally, there are mixed reviews of Starlink’s ability to withstand the elements. Some users in the West concur with the company’s assurances that connections remain strong during extreme weather events, but others report disruptions. In South Asia, where extreme weather is frequent, this could be another turnoff.

Furthermore, many South Asian governments seek influence over foreign firms’ operations, which may rankle Starlink. This disconnect has played out publicly in Nepal, where Starlink officials have balked at a law that requires foreign companies to agree to a domestic stake of at least 20 percent.

As a result, Starlink may struggle to penetrate South Asian markets with no shortage of cheaper alternatives. Bangladesh is the only state in the region known to have formally agreed to provide a license to Starlink, although it’s unclear when the service will be available there. (The company says 2025.) India is close to a licensing agreement after Starlink reportedly found a solution to Indian data localization concerns.

Starlink’s challenges in the region underscore a broader irony: South Asia is an attractive destination for global tech investors, but the region also throws up a striking number of obstacles: cost and local ownership issues, a lack of skilled workers, and periodic crackdowns on online content.

In India, Musk may fare better with another of his prized companies. New Delhi is rapidly expanding its electric vehicle sector, and it is keen to attract Tesla. But despite repeatedly signaling his desire to enter the Indian market, Musk abruptly postponed a meeting in India with Prime Minister Narendra Modi last month. He did manage to visit Beijing, though, raising some eyebrows in New Delhi.

For now, at least, when it comes to Musk and South Asia, it seems that the stars have not yet aligned.

What We’re Following

U.S. bans former Bangladesh Army chief. On Monday, the U.S. State Department announced travel restrictions on Aziz Ahmed, who served as Bangladesh’s Army chief from 2018 to 2021, over alleged corruption. The announcement accused Ahmed of helping his brother evade justice for illegal activities and said Ahmed accepted improper military contracts and bribes. (These allegations and more were laid out in detail in a 2021 Al Jazeera documentary.)

The United States sanctioned Bangladesh for the first time in 2021, focusing on a paramilitary organization accused of human rights abuses. Several unnamed Bangladeshis were also hit with visa restrictions last year related to “undermining the democratic election process.”

Still, the Monday announcement caught Dhaka by surprise. The United States had taken a softer public line on Bangladesh in the months since the country’s January elections, which the U.S. State Department labeled not free or fair. Public messaging has struck a more positive tone: During a trip to Dhaka last week, Donald Lu, the U.S. assistant secretary of state for South and Central Asian affairs, spoke of the importance of moving ties forward.

The restrictions on Ahmed are a reminder that human rights and democracy promotion remain a core element of the U.S.-Bangladesh relationship. And given Washington’s desire to ensure a cordial partnership, the decision is actually a fairly safe bet: It’s a relatively light punishment that doesn’t go after economic assets, and it targets a retired official. Tellingly, Bangladesh’s government hasn’t come to Ahmed’s defense.

South Asian leaders mourn Raisi. Leaders across the region expressed condolences for Iranian President Ebrahim Raisi after his death in a helicopter crash last weekend alongside Foreign Minister Hossein Amir-Abdollahian and six others. Several South Asian governments declared a period of mourning, including India’s.

As South Asia Brief explained last month, Iran is looking to expand engagement across the region; one of Raisi’s last foreign trips was a visit to Pakistan and Sri Lanka last month. Although Raisi’s death isn’t likely to directly affect the region’s interests, Iran’s sudden power transition will be watched closely in South Asian capitals, especially given surging instability in the Middle East.

Officials will keep an eye on whether Raisi’s successor introduces any significant policy shifts—not only in terms of policy toward the Israel-Hamas war, but also toward Saudi Arabia, a key partner of both India and Pakistan.

Indian election update. India completed its fifth phase of voting in ongoing national elections on Monday, when voters in six states and two union territories went to the polls. They included the major electoral prize of Uttar Pradesh, India’s most populous state and a ruling Bharatiya Janata Party (BJP) stronghold; and the disputed region of Kashmir.

One of the big storylines in recent days has been the question of anti-incumbency, even as the BJP is expected to win. In private conversations, some Indian political analysts have predicted that Modi and the BJP will struggle to earn the parliamentary supermajority they seek. Some are even predicting that the party will fall short of its margin of victory in the 2019 elections. (Of course, other analysts argue that the BJP could do better than 2019.)

The skeptics have cited relatively low voter turnout compared to 2019 in the early phases of voting, which some analysts think may reflect voter apathy and unhappiness with the BJP. According to initial data released by India’s election commission for the current election phase, turnout was pegged at a robust 60.48 percent, just a bit lower than in 2019.

Some of the highest turnout occurred in states not currently governed by the BJP, such as West Bengal. Meanwhile, turnout in Kashmir rose to its highest level since 1984—a boost for the BJP, which has argued that the situation in Indian-administered Kashmir has stabilized since New Delhi revoked its special autonomous status in 2019.

Under the Radar

Hundreds of Pakistani students living in Kyrgyzstan have flown home in recent days after local mobs attacked university facilities housing Pakistanis and other foreign students in the capital, Bishkek, last weekend.

The circumstances surrounding the violence are unclear; what is known is that mobs began targeting foreign students after some locals got into an argument with Egyptian students. Because of their relatively large number—Pakistanis comprise about 12,000 of the roughly 60,000 international students in Kyrgyzstan—Pakistanis may have been an easy target.

Both the Kyrgyz and Pakistani governments have confirmed that there were several injuries to students and no deaths—despite initial unconfirmed social media reports. Pakistani Foreign Minister Ishaq Dar visited Bishkek on Tuesday. Yet the damage was done: Hundreds of students have left, and the incident angered many Pakistanis, who accused the government of not acting swiftly enough.

FP’s Most Read This Week

• The U.S. Navy Can’t Build Ships by Gil Barndollar and Matthew C. Mai
• The Man Who Would Help Trump Upend the Global Economy by Edward Alden
• The Day After Iran Gets the Bomb by Stephen M. Walt

Regional Voices

 In the Print, former civil servant Sanjeev Chopra discusses the idea of adding a second time zone in India, in the country’s east. He asks, “Considering that countries like France have thirteen time zones [including overseas territory], and Russia and the US have eleven each, with daylight savings—is it time for India to at least discuss the pros and cons of this issue threadbare?”

An Express Tribune editorial laments the frequency of wildfires in Pakistan’s Margalla Hills National Park, including one this month that spread across a nearly two-mile area. “Let this recent incident serve as a call to action. Enhancing our firefighting capabilities will go a long way in safeguarding the Margalla Hills and ensuring their beauty and biodiversity endure for generations to come,” it argues.

Journalist Sohrab Hassan decries new rules that forbid journalists from entering Bangladesh’s central bank. “When the journalists get information from various sources, they need to go to Bangladesh Bank to clarify these stories. If this is seen as conspiratorial or if attempts are made to conceal the facts, this will not bode well for Bangladesh Bank,” he writes in Prothom Alo.