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Time of India

R&D? Rarely

Dependence in critical areas makes the nation vulnerable. Strategic interest must prevail over economic sense Germany's crude reserves are so small, they won't last three months in an emergency. So how did Hitler wage war for five years? By turning coal into petrol. Over 92% of the Luftwaffe's aviation fuel was synthetic. As the world grapples with China's rare earth curbs, there's a useful lesson here. While the rare earths crisis that started with China's export curbs on April 4 may be blowing over – Trump announced on Truth Social yesterday, 'Full magnets, and any necessary rare earths, will be supplied, up front, by China' – it will have a once-bitten-twice-shy effect. Over the past few weeks, Western carmakers have considered producing cars minus some components that use rare earths. At home, Maruti's had to scale back production plans for its first EV due to a global shortage of rare earth magnets. As our second Op-Ed explains, these magnets contain about 25% of a rare earth element called neodymium. It's one of the so-called 'light' rare earths that are available in India, but we don't produce enough of it because cheap Chinese supplies made investment in this area unattractive. While you can make motors without rare earths, other devices like TV screens, computers and MRI machines can't do without them. That's why India needs to build a large rare earths industry. And with the world's fifth largest rare earth reserves, it's well-placed to do so. Likewise, it needs to end its dependence on China for 70% of active pharmaceutical ingredients or APIs, because while buying from the cheapest supplier makes economic sense, it's a strategic risk. The aim must be to reduce dependence because dependence, especially in critical products, is vulnerability. About 90% of our crude is imported. An electric future will take care of that, but not if it means 100% dependence on China for lithium batteries. To find alternatives – like Germany's WW-II 'synfuels' – we need big investments in R&D, which is not our strong suit. As a nation, we invest only 0.6% of our $4tn GDP in research. China invests 2.4% of $18tn, US 3.5% of $29tn. And our private sector is even stingier, accounting for only a third of the national R&D spend, as against 70% in US and S Korea. The rare earth crisis is a brief distraction, the real issue is India's rare investment problem, and it needs national attention now. Facebook Twitter Linkedin Email This piece appeared as an editorial opinion in the print edition of The Times of India.