New Delhi, June 7 -- A dramatic rift between U.S. President Donald Trump and billionaire entrepreneur Elon Musk is sending political and economic shockwaves across the globe.

Once considered allies, the relationship soured after Musk publicly criticized Trump's new federal spending bill, calling it an "abomination." In response, President Trump threatened to cancel lucrative government contracts with Musk's companies-including SpaceX, which holds key deals with NASA and the U.S. military.

Adding to the fallout, Trump on Friday dismissed Musk as, quote, "a man who has lost his mind," while hinting that federal subsidies for Tesla and other Musk-led ventures could soon come under review.

Markets responded swiftly. Tesla shares plunged 14...