Happy Diwali! A World Sustainability Day Reflection on Rare Earths, Resilience & Connected Conversations

Its funny how connected conversations can get. If you, like me, recently entered the stock market, you probably have lost more than gained. So I asked my brother Mayukh Chakravarti to explain, why foreign investors pulling out of Indian funds and the Sensex showing more downs than ups, what’s driving this volatility? He explained, and then I came across research by Swastik Kar , who highlighted how the synthesis of MoS? can achieve the highest possible quality with only 15% of the experimental data required by traditional methods. This got me thinking about the big picture—how technological innovations like this could play a role in reducing our dependency on rare earth materials and potentially stabilize our economy in the long run

Heres connecting the dots - While inflation and global economic uncertainty are usual suspects, there’s a lesser-known factor that often goes unnoticed: our heavy reliance on rare earth materials, most of which come from a single source—China.

Rare Earth Materials: Why They Matter

If you’re wondering why rare earth materials matter, think of them as the unsung heroes behind nearly every modern technology. Your mobile phone, your laptop, the AI conversations, ChatGPT, Rare earth is for manufacturing the high-tech components we use every day—from AI chips that power advanced computing to cooling systems that keep servers from overheating. Rare earth materials are also critical in renewable energy technologies, advanced building materials, and smart infrastructure. HVAC sensors in hotels, HVAC technology! Simply put, rare earth is the backbone of our sustainable future.

Here’s the catch: China controls around 85% of the global supply of these materials. This monopoly isn’t just about having the most of something—it’s about being able to control who gets it, when, and at what cost. For India, heavily reliant on these imports, this dependency brings a slew of problems that ripple out into the wider economy.

How This Affects the Indian Economy

So, why should a material supply issue matter to the stock market? The dependency on Chinese rare earths exposes India to significant risks in terms of cost and supply chain disruptions. So if the US and China go Head to head / prices will fluctuate due to geopolitical or economic factors, the costs of producing tech, green infrastructure, and other sustainable solutions in India also go up. These increased costs don’t just affect companies directly; they get passed down to consumers, contributing to inflation and slowdown across various sectors.

To control inflation, the RBI has had to adopt a more restrictive monetary policy, keeping interest rates high. And while that’s necessary for economic stability, it also makes borrowing more expensive, which can slow down growth and make India’s market less appealing to investors. On top of that, rising interest rates in the United States make U.S. bonds a safer, more attractive option, prompting foreign investors to pull money out of riskier markets like India.

When foreign investors leave, they take liquidity with them, causing indices like the Sensex to drop. For new investors like us, this can feel frustrating and unpredictable, as we’re left watching our investments take a hit while trying to understand the bigger picture.

The Role of Innovation: How Machine Learning Can Help

Here’s where technology offers a glimmer of hope. Innovations in material science, especially through machine learning, are showing us new ways to optimize the use and development of rare earth materials. Machine learning can accelerate material synthesis, making it possible to create high-performance materials more efficiently and with fewer resources. By identifying the best "recipes" for these materials faster than ever before, we can reduce waste and improve the quality of the end product.

For example, researchers like Swastik Kar have found ways to cut down on the time required to develop materials like molybdenum disulfide (MoS?)—used in advanced electronics and renewable energy—by 85%. https://onlinelibrary.wiley.com/doi/10.1002/admt.202401465

Innovations like these could help India decrease its reliance on imported rare earths. For industries like hospitality, technology, and manufacturing, this could mean more affordable access to sustainable solutions, lower operational costs, and a stronger foothold in the global market. It would also mean lower interest rates, globally. And for investors, a more resilient and diversified economy and the ability to invest in the economy.

Why This Matters for Sustainable Development in India

The implications go beyond just economics. For India to achieve its sustainability goals, from reducing carbon emissions to advancing green infrastructure, access to rare earth materials is essential. These materials are the foundation of technologies like electric vehicles, energy-efficient buildings, and smart grids—all critical for a sustainable future.

But if we’re overly reliant on a single supplier, especially one with as much leverage as China, our ability to achieve these goals is at risk. By investing in technological solutions that help optimize rare earth usage and exploring alternative supply chains, India can build a more resilient pathway to sustainable development. This doesn’t just benefit big corporations—it impacts every sector that relies on tech-driven efficiency, from healthcare to hospitality to education.

The Bigger Picture: Stability for Investors and Growth for India

If you’re still watching your investments and wondering where things will go from here, understanding these dynamics might provide some insight. Addressing rare earth dependency through technological innovation and diversified sourcing isn’t just about keeping inflation in check or reducing operational costs; it’s about creating an ecosystem that can withstand global shocks and local disruptions alike.

For investors, a stable, resilient economy attracts long-term capital and promotes sustainable growth, making it a safer place to invest in the future. And for India, reducing rare earth dependency means not only economic resilience but also the potential to lead in sustainable technologies, attracting both domestic and foreign investment that can drive meaningful progress.

In Summary

Yes, AI is going to consume a lot of energy and generate heat.

Yes, US Bonds are getting more expensive, which could drive up inflation.

Yes, this might slow down investments, hotel development, and more.

Yes, the US sees China as a threat, so they're not likely to share technology or know-how, and China isn’t eager to trade rare earth materials.

And yes, we need science to step up—finding ways to synthesize rare earth materials could help create a balanced future we can all look forward to.