TLDR: The Indian government has launched a monumental ₹1 lakh crore Research, Development, and Innovation (RDI) Scheme to significantly boost private sector R&D, particularly in deep-tech and strategic areas like Artificial Intelligence. This initiative aims to foster India’s technological sovereignty and position the nation as a global innovation hub, with a focus on long-term, low-interest funding for critical sectors.
In a landmark move to accelerate India’s technological advancement and secure its position as a global innovation leader, the Union Cabinet has approved the ambitious ₹1 lakh crore Research, Development, and Innovation (RDI) Scheme. This substantial fund is designed to unlock the immense potential of the private sector in high-impact research and development, with a particular emphasis on deep-tech and strategic sectors.
The RDI Scheme, approved around July 2025, is poised to be a game-changer for India’s R&D landscape. It addresses the long-standing challenge of accessing growth and risk capital for private enterprises, especially startups and MSMEs operating in high-risk, high-impact domains. The scheme will provide long-term financing at low or even nil interest rates, a crucial mechanism to spur innovation where traditional funding channels often fall short.
Managed under the strategic guidance of the Anusandhan National Research Foundation (ANRF), chaired by the Prime Minister, the initiative aligns with the broader vision of ‘Viksit Bharat by 2047’ – a developed India by its centenary of independence. The Department of Science and Technology (DST) will serve as the nodal department for its implementation.
Key objectives of the RDI Scheme include promoting private sector-led R&D and innovation in ‘sunrise domains’ such as Artificial Intelligence (AI), semiconductors, clean energy, quantum computing, and aerospace. It also aims to encourage investment in technology acquisition and commercialization, finance projects with high Technology Readiness Levels (TRLs), and support strategic sectors vital for national security and economic competitiveness. A dedicated Deep-Tech Fund of Funds will also be established to stimulate long-term innovation.
Industry leaders have widely lauded this initiative. Dr. Ajai Chowdhry, Founder of HCL and Chairman of the EPIC Foundation, hailed the scheme as a ‘historic step toward achieving technology sovereignty and realizing the long-term vision of Viksit Bharat by 2047.’ He further stated, ‘The newly approved R&D fund will play a pivotal role in enabling India to develop cutting-edge products and assert its position as a Product Nation.’ Baba Kalyani, Chairman & MD of Bharat Forge Ltd., echoed this sentiment, remarking that the scheme ‘marks a defining moment as India accelerates its transformation towards a technology-led Innovation Driven economy and a Products Nation.’ Union Minister Ashwini Vaishnaw underscored the policy’s transformative power, stating, ‘This scheme will be a game-changer in the world of research and innovation. It will have a major impact on emerging and sunrise sectors and boost private sector participation in R&D.’
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The scheme’s two-tiered funding model involves a Special Purpose Fund (SPF) within the ANRF, acting as the central custodian, which will allocate capital to second-level fund managers. These managers will then offer funding to companies and startups, primarily through long-term concessional loans, with provisions for equity investments, especially for startups. This robust framework is expected to foster collaborative innovation between academia, startups, and industry, propelling India closer to self-reliance in strategic technologies and strengthening its global competitiveness.
