Centre approves ₹1 lakh crore scheme to boost R&D, innovation in sunrise sectors
Narendra Modi
, on Tuesday approved the 'Research Development and Innovation (RDI) Scheme' with a corpus of ₹1 lakh crore, a move that is expected to boost private sector investments in research and development (R&D) in
sunrise sectors
, such as deep tech and electronics.
'Recognizing 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 to spur private sector investment in RDI,' the Central government said in an official statement.
India has been a laggard vis-à-vis mature markets like the US, Japan, and China, in terms of R&D investments. Experts estimate that India allocates only about 0.64% of its GDP to investing in R&D.
As per the government statement, the scheme envisages alleviating the challenges in funding the private sector and seeks to provide growth and risk capital to sunrise and strategic sectors to facilitate innovation, promote adoption of technology, and enhance competitiveness.
Other key objectives of the scheme include financing transformative projects at higher levels of technology readiness levels (TRL); supporting the acquisition of technologies critical or of high strategic importance; and facilitating the setting up of a deep-tech fund of funds.
The governing board of
Anusandhan National Research Foundation
(ANRF), chaired by PM Modi, will provide overarching strategic direction to the RDI Scheme. The executive council (EC) of ANRF will approve the scheme's guidelines, and recommend second-level fund managers and scope and type of projects in the sunrise sectors.
An empowered group of secretaries (EGoS) led by the Cabinet Secretary will be responsible for approving scheme changes, sectors and types of projects as well as second-level fund managers, besides reviewing the performance of the Scheme, as per the statement.
The Department of Science and Technology (DST) will serve as the nodal department for the implementation of the RDI Scheme.
The RDI Scheme will have a two-tiered funding mechanism. At the first level, there will be a Special Purpose Fund (SPF) established within the ANRF, which will act as the custodian of funds. From the SPF funds, shall be allocated to second-level fund managers, primarily in the form of long-term concessional loans.
The funding for R&D projects by the second-level fund managers would normally be in the form of a long-term loan at low or nil interest rates. Financing in the form of equity may also be done, especially in the case of startups. Contribution to Deep-Tech Fund of Funds (FoF) or any other FoF meant for RDI may also be considered.
'By unlocking ₹1 lakh crore of long-term capital for sunrise and strategic sectors, this initiative will catalyze private-sector-led innovation in areas critical to India's economic and technological sovereignty — including semiconductors, deep-tech, and electronics. IESA strongly supports this vision and will actively work to mobilise its member base and ecosystem partners to align with the RDI goals,' said
Ashok Chandak
, president of IESA and SEMI India.
'This fund will also enable translational research by the private sector. Typically, under ANRF, technical, education/research institutions will take it to Technology Readiness Level 4. Private sector (both corporate and startups) can then take it for translational research to TRL-9 for India and the world,' said Ajai Chowdhry, founder of HCL, and chairman of EPIC Foundation.
The newly approved R&D fund will enable India to develop cutting-edge products across various sectors and assert its position as a product nation in different areas, Chowdhry said.
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