Context: The Central government has announced a Rs 1 lakh crore fund to empower the private sector in advancing India's sovereign technology goals. The RDI Scheme will offer long-term, low-interest loans and risk capital for deep-tech and transformative projects.
Relevance of the Topic: Prelims: key facts about the Research, Development, and Innovation (RDI) Scheme.
Research, Development, and Innovation (RDI) Scheme
- The government has launched the ambitious Research, Development, and Innovation (RDI) Scheme in 2025.
- Aim: To incentivise private-sector participation in research and development (R&D), particularly in sunrise and strategic sectors.
- Outlay: ₹1 lakh crore over 6 years, with ₹20,000 crore allocated for FY26.
- A dedicated 'Deep-Tech Fund of Funds' will also be established to scale up private investment in innovation.
- Nodal Agency: Department of Science & Technology (DST).
Key Features of the Scheme:
- The scheme will provide long-term, low-interest loans and risk capital to support deep-tech, critical technologies, and transformative projects.
- Technology sectors of strategic importance have been identified under the RDI Scheme. These include:
- Energy Security and Climate Action.
- Deep technologies such as Quantum Computing, Artificial Intelligence, Semiconductors, Biotechnology, and Digital economy.
- Sectors critical for Strategic and Economic security.
- There exists the flexibility to include additional sectors based on approval from the Empowered Group of Secretaries (EGoS).
Funding Mechanism
- Fund allocation to innovators, researchers, and start-ups will be managed through a Special Purpose Fund (SPF) under the Anusandhan National Research Foundation (ANRF), which serves as the Level 1 Fund Custodian.
- Implementation will be carried out by Second-Level Fund Managers, including Alternate Investment Funds (AIFs), Development Finance Institutions (DFIs), Non-Banking Financial Companies (NBFCs), and Focused Research Organisations (FROs), such as BIRAC, TDB, and IIT Research Parks, with approval from the Empowered Group of Secretaries (EGoS).
- Funding to R&D projects by the 2nd level fund managers would normally be in the form of long-term loan at low or nil interest rates.
- Financing in the form of equity may also be done, especially in case of startups.
- Contribution to Deep-Tech Fund of Funds (FoF) or any other FoF meant for RDI may also be considered.
Significance:
- Addresses funding gaps in private sector R&D by providing growth and risk capital to sunrise and strategic sectors.
- Supports innovation, technology adoption, and competitiveness with sector selection guided by India’s economic priorities and strategic needs.
- Finances transformative projects at higher levels of Technology Readiness Levels (TRL) 4 and above.
- Enables acquisition of strategically important technologies, and promotes the creation of a Deep-Tech Fund of Funds.
By addressing the critical need of the private sector for long-term affordable financing, the RDI Scheme facilitates a conducive innovation ecosystem in the country.
Also Read: India’s R&D Investment: Challenges and Opportunities