CII urges govt to establish India Development and Strategic Fund

The industry body has urged government to set up a professionally managed, sovereign-backed fund to mobilise domestic and global capital and strengthen India's economic and strategic interests by 2047

In a proposal to the government, the Confederation of Indian Industry (CII) has suggested setting up a sovereign-backed, professionally managed India Development and Strategic Fund (IDSF) to support long-term growth and global economic security.

 

CII said the IDSF would be a twin-arm national fund that would mobilise domestic and global savings and recycle national capital from mature assets into new productive capacity while securing critical economic interests abroad.

 

How large could the proposed IDSF corpus be by 2047?

 

The industry chamber said that with disciplined design and funding, IDSF could, over the next two decades, build a managed corpus in the range of $1.3–2.6 trillion by 2047, comparable in ambition and credibility to the world’s leading sovereign investors. It would involve an initial budgetary allocation to establish credibility, followed by systematic channeling of a share of asset monetisation proceeds, CII said.

 

Stressing that India needs to build its own enduring financial engine for development at a scale that cannot be met by annual budgetary allocations, CII Director General Chandrajit Banerjee said, “India is entering a decisive window of opportunity… To reach developed-economy status by 2047, we need structural, perpetual sources of long-term capital that go beyond the annual budget cycle.”

 

What would be the structure and focus of the IDSF?

 

CII, in a press statement, said that the IDSF would consist of a development and a strategic investment arm.

 

The former would focus on financing long-gestation domestic priorities such as infrastructure, clean energy, logistics, industrial corridors, MSME scale-up, education and skilling, healthcare, and urban infrastructure. “It would act as an anchor investor, crowding in pension funds, sovereign wealth funds, and institutional investors from India and abroad.”

 

The strategic arm would acquire and secure overseas assets critical for India’s long-term economic and security interests — ranging from energy assets and critical minerals to frontier technologies such as semiconductors, Artificial Intelligence, and key global logistics and port assets.

 

“In a world where energy, minerals, technology and logistics are increasingly securitised, economic and strategic policy are now part of the same continuum,” Banerjee said.

 

How could the Fund raise capital and ensure transparency?

 

CII said that over time, a portion of the government’s equity in select public sector enterprises could be transferred to the Fund. The IDSF could also issue thematic instruments such as infrastructure, green, and diaspora bonds to mobilise long-term domestic and international savings, while co-investing with multilateral and bilateral partners.

 

It has recommended a periodic review of the Fund to be published with a public dashboard on corpus size, portfolio mix, sectoral and geographic exposure, and performance metrics. “Annual withdrawal limits should be capped as a percentage of corpus to prevent fiscal misuse, while independent audit and risk frameworks should manage currency, geopolitical, and governance risks,” CII’s proposal said.