Inattention to high tech, minerals is showing, Pg11

Key Highlights:

• The US-led Pax Silica initiative, aimed at securing supply chains in critical minerals, energy, semiconductors, and AI, excludes India, signaling a gap in India's capabilities in these key areas.
• India's R&D spending remains low at 0.6-0.7% of GDP, stagnant for two decades, contrasting sharply with the US (3%) and China (2.5%).
• India imports 90% of its oil and gas, 99.9% of gold, 95% of copper ore, and 100% of critical minerals like lithium, highlighting its dependence on foreign resources.
• Only 25-30% of India's geological potential has been explored, with the mining sector contributing just 2% to the GDP.

Detailed Insights:

• India's exclusion from Pax Silica underscores its limited contribution to high-tech sectors like semiconductors and AI, as well as in energy and mineral resources, which are central to current global power dynamics.
• The low R&D expenditure hinders India's emergence as a product and innovation hub, with the space sector being a notable exception where India has developed cutting-edge capabilities.
• Despite having rich geology comparable to Australia, India's mineral wealth remains largely unexplored due to policy focus primarily on resource allocation and revenue generation rather than exploration.
• To become relevant in emerging geo-economics, India needs to encourage private sector participation in mineral exploration by allowing them to monetize discoveries without government intervention.
• India can leverage its market size to gain a seat at the global high table, but its cautious approach to trade deals, as seen with prolonged negotiations with the US, reflects a tendency towards protectionism.

Key Concepts Involved:

• Pax Silica: A US-led initiative to secure supply chains in critical minerals, energy, semiconductors, and AI.
• R&D Expenditure: Investment in research and development activities, crucial for technological advancement and innovation.
• Geo-economics: The interplay of economics and geopolitics, where economic factors influence international relations and power dynamics.