Govt approves ₹1-trillion RDI scheme to boost private-sector innovation

The scheme will offer long-term, low-interest funding and equity support to boost private R&D in fast-growing tech sectors

The Union Cabinet on Tuesday approved a ₹1-trillion corpus for the Research Development and Innovation (RDI) Scheme, aiming to spur private-sector investment in strategic and high-growth sectors through long-term, low-cost funding.

 

“Recognising the critical role that the private sector plays in driving innovation and commercialising research, the RDI Scheme aims to provide long-term financing or refinancing with long tenors at low or nil interest rates,” the government said in a statement.

 

Addressing private funding gaps

 

The scheme is designed to address gaps in private-sector research funding by offering growth and risk capital to 'sunrise sectors' — industries with high growth potential such as deep-tech, AI, and green technologies.

 

The RDI scheme will also finance technology acquisition of strategic importance, enabling India to strengthen its domestic capabilities in key areas of global competition.   

 

How RDI scheme will work

 

The funding structure will operate at two levels:

 

At the first level, a Special Purpose Fund (SPF) will be established under the Anusandhan National Research Foundation (ANRF), which will manage the ₹1-trillion corpus.

 

At the second level, fund managers will deploy these funds to specific R&D projects via long-tenure loans at little or no interest, or through equity infusions in start-ups.

 

The scheme may also invest in a ‘Deep-Tech Fund of Funds’, a pooled investment vehicle backing innovation-aligned ventures. 

 

Budgetary support and strategic growth

 

The RDI fund was originally announced in the July Budget for FY25. Finance Minister Nirmala Sitharaman, in her Budget speech on February 1 this year, had earmarked ₹20,000 crore to the Department of Science and Technology (DST) for this initiative.

 

DST’s budget has grown from ₹2,777 crore in 2014 to ₹28,509 crore in FY26, and gross expenditure on research and development has risen from ₹60,196 crore to ₹1,27,380 crore over the same period.