In a major push to boost India’s innovation capabilities, the Union Cabinet has approved the ₹1 lakh crore Research, Development and Innovation (RDI) Scheme, aimed at catalysing private sector investment across critical and emerging technology sectors.
The move is seen as a significant step towards bridging India’s R&D spending gap and achieving the government’s vision of transforming the country into a developed nation by 2047 under the “Viksit Bharat” agenda.
Addressing India’s R&D Investment Gap
India currently invests only about 0.64% of its GDP in R&D, trailing behind global peers like the United States, China, and Japan, which allocate between 2% and 5%. The RDI Scheme aims to correct this imbalance by unlocking large-scale, long-term funding specifically for private sector research initiatives.
Union Information and Broadcasting Minister Ashwini Vaishnaw described the scheme as a crucial initiative to strengthen India’s R&D landscape and spur technological self-reliance.
Unique Two-Tier Funding Model
At the core of the scheme is a two-tier financing structure designed to ensure effective deployment of funds:
Special Purpose Fund (SPF): A dedicated corpus will be set up within the Anusandhan National Research Foundation (ANRF), chaired by Prime Minister Narendra Modi. The Union Budget will provide ₹1 lakh crore as a 50-year interest-free loan to this fund.
Second-Level Fund Managers: The SPF will allocate funds to financial intermediaries such as Alternative Investment Funds (AIFs), Non-Banking Financial Companies (NBFCs), and Development Finance Institutions (DFIs). These entities will offer concessional, long-term loans or equity investments to eligible R&D projects, particularly in high-risk deep-tech and startup ventures.
The scheme also plans to support a dedicated Deep-Tech Fund of Funds to foster investment in advanced technology areas.
Focus on Sunrise and Strategic Sectors
The RDI Scheme is designed to stimulate innovation in “sunrise” sectors and strategic domains critical for India’s economic security and global competitiveness. Priority areas include:
- Semiconductors
- Quantum technologies
- Artificial Intelligence
- Defence technologies
- Space technology
- Robotics and autonomous vehicles
- Telecommunications
Projects with higher Technology Readiness Levels (TRLs) will be specifically targeted to help transition innovations from laboratory research to commercial scale.
Governance and Implementation
The governance framework for the RDI Scheme includes:
The Governing Board of the ANRF, chaired by the Prime Minister, which will set strategic direction.
An Executive Council (EC) under the ANRF, tasked with framing operational guidelines and recommending sectors and fund managers.
An Empowered Group of Secretaries (EGoS) led by the Cabinet Secretary, responsible for performance reviews, approving sectoral changes, and overseeing implementation.
The Department of Science and Technology (DST) will serve as the nodal agency coordinating the rollout of the scheme.
Catalysing India’s Deep-Tech Ambitions
The Cabinet’s decision comes as India’s deep-tech sector gains momentum, recently ranking sixth among leading global innovation ecosystems. The government hopes the RDI Scheme will unlock critical private investment, foster commercialisation of sovereign technologies, and build the foundation for India’s transition into a high-tech economy by 2047.
The industry now awaits further details on fund allocation criteria and timelines for disbursement under what is being described as one of the largest R&D-focused initiatives in India’s history.
