By Abhay Ray 
Introduction
The Union Cabinet approved a Research and Development fund for research and innovation in the private sector. The Research, Development and Innovation scheme with a corpus of ₹1 lakh crore is intended to encourage the private sector to scale up research, development and innovation in sunrise domains and in other sectors whose indigenization is important for strategic reasons or for economic security or for Atmanirbharta or in public interest, according to government sources.
What’s the RDI Scheme?
The ₹1 lakh crore Research, Development & Innovation (RDI) Scheme, approved by the Union Cabinet on July 1, 2025, aims to boost private sector investment in cutting-edge technologies like AI, quantum computing, biotech, and green energy. Funded through long-term, low- or zero-interest loans and equity, the scheme supports advanced R&D and tech acquisition. It will be managed by the Anusandhan National Research Foundation (ANRF) via a two-tier funding structure, involving specialized fund managers. The RDI Scheme is a major step toward making India a global innovation leader.
Driving Innovation through Private Sector Partnership
Recognizing the private sector’s pivotal role in research commercialization and deep-tech advancements, the RDI Scheme introduces a long-term financing mechanism offering low or zero interest rates. This approach addresses long-standing constraints in accessing growth and risk capital, particularly in high-risk, high-impact domains.
The scheme’s key objectives include:
- Scaling up R&D and innovation in sunrise sectors and areas crucial for economic and strategic security.
- Financing transformative projects with high Technology Readiness Levels (TRL).
- Supporting the acquisition of critical and strategic technologies.
- Facilitating the creation of a Deep-Tech Fund of Funds to support deep-tech ventures and startups.
Institutional Structure & Governance
The implementation of the RDI Scheme will be overseen by a multi-tiered governance structure:
- Anusandhan National Research Foundation (ANRF), chaired by the Prime Minister, will provide overall strategic direction.
- The Executive Council (EC) of ANRF will finalize guidelines, sectors, and project types.
- An Empowered Group of Secretaries (EGoS), led by the Cabinet Secretary, will monitor scheme progress, approve key decisions, and evaluate fund managers.
- The Department of Science and Technology (DST) will serve as the nodal implementation agency.
Funding Framework: Two-Tiered Mechanism
At the heart of the RDI Scheme is an innovative two-tiered funding model:
- Special Purpose Fund (SPF) within ANRF will act as the central custodian of the ₹1 lakh crore corpus.
- Second-level fund managers will deploy funds in the form of:
- Concessional long-term loans to R&D-intensive enterprises.
- Equity investments, especially for high-potential startups.
- Contributions to Deep-Tech Fund of Funds and other RDI-centric financial instruments.
Building a Future-Ready Innovation Ecosystem
The RDI Scheme is not just a funding instrument—it is a bold vision to position India as a global hub of innovation. By enabling access to affordable capital, incentivizing high-impact R&D, and nurturing sunrise industries such as AI, quantum computing, space tech, clean energy, and biotechnology, the scheme aspires to:
- Propel India towards technological self-reliance.
- Strengthen the country’s strategic capabilities.
- Enhance global competitiveness in emerging markets.
Towards Viksit Bharat 2047
With this historic investment in research and innovation, the Government of India is signaling a decisive shift from policy intent to implementation. The RDI Scheme promises to bridge the gap between scientific potential and market-ready solutions, making innovation a cornerstone of India’s development agenda. As the country looks ahead to its centenary of independence, the RDI Scheme could well be the launchpad that accelerates India’s transition into a knowledge-driven economy.
Conclusion
The ₹1 lakh crore RDI Scheme marks a transformative step in India’s journey toward becoming a global innovation powerhouse. By fostering private sector participation through low- or zero-interest financing, it addresses critical gaps in research funding, particularly in high-risk, high-impact sectors like AI, quantum computing, biotech, and green energy. With a robust governance and funding framework led by the Anusandhan National Research Foundation, the scheme is poised to unlock technological self-reliance, strategic resilience, and global competitiveness. As India moves toward Viksit Bharat 2047, the RDI Scheme stands as a pivotal catalyst for building a future-ready, innovation-driven economy.
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