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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.
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#Cabinet approves Research Development and Innovation Scheme with corpus of Rs. 1 lakh Cr Scheme aims to provide long-term financing or refinancing with long tenors at low or nil interest rates to spur private sector investment in RDI#CabinetDecisions pic.twitter.com/XVmsP6KYky
— Dhirendra Ojha (@DG_PIB) July 1, 2025
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.
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