If the primordial curvature perturbation followed a Gaussian distribution, primordial black holes (PBHs) will be Poisson distributed with no additional clustering. We consider local non-Gaussianity and its impact on the initial PBH clustering and mass function due to mode coupling between long and short wavelength modes. We show that even a small amount of non-Gaussianity results in a significant enhancement on the PBH initial clustering and subsequent merger rate and that the PBH mass function shifts to higher mass PBHs. However, as the clustering becomes strong, the local number density of PBHs becomes large, leading to a large theoretical uncertainty in the merger rate.