Government Launches ₹1-Trillion RDI Initiative to Propel Private-Sector Innovation

The Union Cabinet has approved a ₹1-trillion Research Development and Innovation (RDI) Scheme to boost private-sector innovation in strategic sectors like AI, deep-tech, and green technologies. Managed under the Anusandhan National Research Foundation, the scheme provides long-term, low-cost funding, including loans and equity investments, to address funding gaps. Announced in FY25’s Budget, it also supports technology acquisition and a Deep-Tech Fund of Funds. The initiative aims to position India as a global leader in innovation and advanced technologies.

In a landmark decision, the Union Cabinet has greenlit a ₹1-trillion initiative aimed at revolutionizing India's private-sector innovation landscape. The Research Development and Innovation (RDI) Scheme seeks to bridge funding gaps in strategic and burgeoning industries through long-term, low-cost financing, with the ultimate goal of fostering cutting-edge advancements and boosting India's global competitiveness.

A New Era of Private-Sector Innovation

Acknowledging the vital role of private enterprises in driving innovation and commercializing research, the government is offering financial support under the RDI Scheme with extended repayment periods and minimal or zero interest rates. This bold approach is expected to empower businesses to venture into high-risk, high-reward sectors with greater confidence.

“The scheme is designed to enable private-sector investment in emerging industries by addressing the challenges of growth and risk capital,” the government shared in an official statement.

Targeting High-Growth Sectors

The initiative is particularly focused on "sunrise sectors"—industries poised for rapid growth, including deep-tech, artificial intelligence, and green technologies. By providing critical funding, the scheme aims to not only accelerate innovation but also encourage the acquisition of strategic technologies, strengthening India's indigenous capabilities in globally competitive domains.

How the Scheme Operates

The RDI Scheme will function through a two-tiered funding mechanism:

1. Special Purpose Fund (SPF): At the core of the initiative is an SPF established under the Anusandhan National Research Foundation (ANRF). This entity will manage the ₹1-trillion corpus.

2. Project-Level Deployment: Fund managers will channel these resources into specific research and development projects, offering long-tenure loans at negligible interest rates or equity investments in start-ups.

Additionally, the scheme may contribute to a "Deep-Tech Fund of Funds," a collective investment vehicle aimed at supporting ventures aligned with innovation-driven objectives.

Budgetary Momentum and Strategic Vision

The seeds of the RDI Scheme were sown during the Union Budget for FY25, where Finance Minister Nirmala Sitharaman announced an allocation of ₹20,000 crore to the Department of Science and Technology (DST) to kickstart the initiative. Over the past decade, DST's funding has seen remarkable growth, rising from ₹2,777 crore in 2014 to a projected ₹28,509 crore by FY26. Similarly, India's gross expenditure on research and development has more than doubled, growing from ₹60,196 crore to ₹1,27,380 crore during the same period.

Catalyzing a Competitive Edge

By addressing the funding gaps that often hinder private-sector innovation, the RDI Scheme is poised to position India as a global leader in advanced technologies. With its ambitious vision and robust financial backing, the initiative promises to unlock the potential of India's brightest minds and pave the way for transformative growth in the years to come.

This comprehensive strategy underscores the government’s commitment to fostering a thriving ecosystem of innovation and technological excellence, ensuring that India remains at the forefront of the global innovation race.