The Union Cabinet has approved a Rs 1 trillion corpus under the Research Development and Innovation (RDI) scheme to drive private-sector investments in strategic and high-growth areas such as deep-tech, artificial intelligence (AI), and green technologies. The initiative is designed to close critical funding gaps in private R&D by offering long-term, low-cost capital and growth funding to sunrise sectors.
The scheme will also support the acquisition of technologies deemed strategically important, enhancing India’s domestic capabilities in sectors of global relevance and competition. By backing innovation through accessible financing, the government aims to build a robust ecosystem for cutting-edge research and indigenous development.
Further, the funding structure will operate in two layers. At the first level, a Special Purpose Fund (SPF) will be set up under the Anusandhan National Research Foundation (ANRF) to manage the Rs 1 trillion corpus. Meanwhile, at the second level, designated fund managers will channel the funds into specific R&D projects, either as long-tenure, low- or no-interest loans, or through equity investments in start-ups.
The RDI fund was first announced in the Union Budget for financial year 2025. In her budget speech, the Finance Minister had earmarked Rs 200 billion to the Department of Science and Technology (DST) to kickstart the initiative.
In addition, the scheme may also participate in a proposed ‘Deep-Tech Fund of Funds’, a pooled investment vehicle aimed at supporting ventures aligned with the national innovation agenda. This is expected to stimulate a multiplier effect in R&D investments by mobilising private capital.