Latest news with #RDI
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Business Standard
12 hours ago
- Business
- Business Standard
RDI scheme a major boost for R&D and deep-tech in India: Industry
The approval of the Research, Development and Innovation (RDI) scheme by the Union Cabinet on Tuesday, with a corpus of Rs 1 trillion, is being seen as a major boost to research and development and deep-tech investment in India. Industry players and associations welcomed the announcement as a step in the right direction. India's R&D investment has long been a concern, with the country allocating only about 0.64 per cent of its GDP—significantly lower than the 2–5 per cent invested by countries such as the US, Japan and China. Many hope India will also attempt what China did in 2008 under its 'Thousand Talent Plan' to attract talent back to the country. The programme aimed to bring researchers and entrepreneurs home to contribute to the scientific and technological journey. 'The wish from industry is for the Fund to provide grants for research and fund the commercialisation of innovation. A scheme to attract global Indian talent and allow them to set up labs in India will be a critical factor for success. This will allow equity capital to follow and fuel the commercialisation of Indian innovation,' said Siddarth Pai, founding partner, 3One4 Capital. He added that India's innate talent requires infrastructure and policy support to thrive and move up the value chain. 'A single-window clearance for labs and import of equipment will be crucial to create this ecosystem,' he said. The scheme, announced in the July 2024 Budget, has excited the industry because of the two-tiered financing structure it proposes. Funds will flow through a 50-year, interest-free loan to the Anusandhan National Research Foundation (ANRF), chaired by the Prime Minister. The ANRF will then offer long-term concessional loans to second-level fund managers such as alternative investment funds, development finance institutions and non-banking financial companies. These, in turn, will finance individual projects. Anjali Bansal, founding partner of Avaana Capital, said this was a much-awaited move: 'Deep-tech ventures have longer gestation periods, complex technical risks, and often don't align with traditional venture capital timelines. India needs a broader spectrum of financing instruments—early catalytic capital, innovation-linked debt, and blended finance models that allow commercial investors to participate as the companies scale. The challenge lies in balancing long-term investments in deep tech with short-term economic gains. Patient capital, combined with strong technical and business teams focused on fundamental unit economics, can build a scaled business and deliver outsized returns over time.' Pai said a significant aspect of the special-purpose fund was that it enables the government to deploy capital through special purpose vehicles, AIFs and other instruments in collaboration with the private sector. 'This marks a strategic shift, recognising that industry has a better grasp of emerging technology needs,' he said. He added that the fund-of-funds model has worked well in developing the startup ecosystem in India. 'The same model lends itself to fuelling innovation with the government as a partner.' While the scheme's structure has been announced, the industry is now awaiting finer details—including the criteria for fund allocation and the timeline for disbursement. Ajai Chowdhry, founder of HCL and chairman of the EPIC Foundation, said the fund would also enable translational research by the private sector. 'Typically, under the ANRF, technical and research institutions will take innovation up to TRL-4 (technology readiness level). The private sector—both corporates and startups—can then take it to TRL-9 for India and the world,' he said. Industry players also raised concerns over the composition of the ANRF's governing board. Several told Business Standard that a board comprising only bureaucrats could derail the initiative. 'Ideally, people with global experience or those currently building products or services should be part of the board. This will be key. A board made up only of academics or bureaucrats will not help,' said a senior executive at a venture capital firm. According to the details released on Tuesday, the ANRF's governing board will provide overall strategic direction to the RDI scheme, while its executive council will recommend guidelines for the scheme and second-level fund managers, as well as define the scope and types of projects in sunrise sectors. Changes to the scheme, sectors or project types—as well as changes to second-level fund managers—will be approved by an empowered group of secretaries led by the Cabinet Secretary, the statement said.
Mint
15 hours ago
- Business
- Mint
How a $12 bn R&D scheme could change the way India makes technology
New Delhi: On Tuesday, the Union Cabinet approved a $12 billion scheme to support research, development and innovation (RDI) in India's technology and electronics sectors. The move came after decades of industry demands seeking promotion of designing electronics in India—and not just assembling consumer looks at why and how this scheme can affect the contours of India's electronics industry. How will the government's scheme work? With a net outlay of $12 billion ( ₹1 trillion) spread over multiple years, the scheme to finance the R&D budgets of companies will operate under the Anusandhan National Research Foundation (ANRF) of the Department of Science and Technology. Through a 'special purpose fund' within ANRF, the Centre will appoint an investment committee, which will be managed by ANRF's executive council. A group of secretaries under the Cabinet secretary will oversee the allocation of funds and appoint fund managers specially for this task. Which companies can apply for funds? Under the scheme, parties eligible to receive R&D grants will include companies working on green energy solutions, biotechnology device manufacturers, pharmaceuticals and medical devices, artificial intelligence solutions and devices catering to agriculture, health and education, digital economy stakeholders such as financial services, deeptech applications such as quantum computing, robotics and space, and 'strategic" technologies that serve national security and public utilities. Why is such a scheme necessary? India's technology ecosystem largely works on secondary layers of applications and innovations. In simpler words, although India builds applications in AI, robotics and other sectors, they are mostly built on foundational, patented technologies developed by companies in the US, China, Japan, Korea and the European Union. This means that the fundamental innovation layer in most technologies is not owned by India today. Industry stakeholders have repeatedly voiced their concerns that in current geopolitical conditions, this leaves India at the risk of facing economic sanctions in case of a conflict with other nations. Furthermore, not owning the fundamental design patent of critical technologies such as communications network infrastructure leaves India vulnerable to cyber warfare and other such concerns—a mass-scale cyber-attack that took down Maharashtra's power grid during India's Galwan Valley skirmish with China in 2020 is a major example of thi New Delhi is keen to change this and replace technology and telecommunications infrastructure supplied to India by Chinese tech companies with locally developed ones. To do this, building core patents requires significant investments in research and development initiatives. But India does not do enough of it. Google invests almost 15% of its quarterly revenue in R&D. Ajai Chowdhry, chairman of industry body Epic Foundation, said that private companies in China and Japan invest up to 5% of their revenue in R&D. In India, however, the median level of R&D investment in the private sector is about 0.6%. Tata Consultancy Services, India's largest technology firm by valuation, invests 1.1% of its yearly revenue in R&D. The RDI scheme now hopes to boost this figure by offering low-interest loans of up to 50 years to boost the R&D budgets in India's private companies. Can this make a major difference? Potentially, yes. So far, Dixon Technologies, Bhagwati Products, Kaynes Technology, Amber and Bharat Foxconn International Holdings have been assembling electronic devices in India at scale. In semiconductors, India's first chip fabrication plant by Tata Electronics is expected to produce its first demonstrator chip by the end of next year. Kaynes, HCL and US-based Micron are creating chip-testing facilities in India, which are set to become operational by the end of this year. But none of this involves the development of patented foundational technologies that are ready for domestic or international usage. In the semiconductor industry, while India is home to almost one-fifth of the world's chip design engineers, it does not own any semiconductor intellectual property (IP) and is reliant on the US quartet of Advanced Micro Devices (AMD), Intel, Nvidia and Qualcomm for chip reference designs. These core electronics designs today power all consumer devices, but more importantly, critical networking hardware, financial services, connected cars, power grids, smart oil rigs and industrial infrastructure. In case of a conflict with any nation that owns patents sourced by India, the country could face the risk of not being able to build its critical infrastructure. Assembly plants, therefore, are only secondary innovation layers and cannot replace the importance of a patent held by other countries. While much will depend on execution, the RDI scheme will seek to help private companies and research institutes to build such patents and help India develop its own critical technology infrastructure. Does this mean that all tech in India will be indigenous? Not overnight. Building patents requires years of investing in research and creating a technology that is fundamentally unique to not infringe upon IP owned by other companies. Another crucial factor is that the US and China do not just own patents, they also build technologies at scale, which allows them to sell chips, devices and other hardware at significantly low costs. For India, building this scale will take time. Eventually, India's goal, as detailed by the ministry of telecommunications, is to replace tech infrastructure sourced from other countries with an indigenous stack. In the long run, indigenisation will be one of the end results of the RDI scheme. This, though, does not mean that all technologies will work in silos. In the long run, Indian technologies will look to comply with global tech infrastructure and be interoperable with what the US and China build.
Time of India
16 hours ago
- Business
- Time of India
Centre approves ₹1 lakh crore scheme to boost R&D, innovation in sunrise sectors
NEW DELHI: The Cabinet, led by Prime Minister 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.
Hindustan Times
a day ago
- Business
- Hindustan Times
₹1L-crore R&D push for private sector unveiled
The Union Cabinet on Tuesday cleared a scheme with a corpus of ₹ 1 lakh crore to channel funding to the private sector for accelerating research, development, and innovation in sunrise and strategic sectors in the country. Union I&B minister Ashwini Vaishnaw during a cabinet briefing in Delhi on Tuesday. (ANI) The Research Development and Innovation (RDI) scheme, shaped through wide consultations with industry experts, will provide long-term financing or refinancing at low or interest-free rates . It will back projects that have moved beyond early-stage research and reached the prototype stage,said union minister Ashwini Vaishnaw at a press briefing on the cabinet's decisions. 'When a company moves beyond the prototype stage, it often faces the 'valley of death,' a critical phase where many innovations fail due to lack of support,' said Vaishnaw. 'This is exactly when timely assistance is needed to turn a promising prototype into a viable product.' The scheme will target sunrise sectors such as clean energy, climate tech, deep tech (quantum applications, robotics, space teach), AI in key areas, biotech, digital agriculture, and also interestingly technologies required for strategic reasons, economic security, self-reliance or public interest. 'Countries that invest heavily in R&D see long-term gains in productivity and technological advancement across industries,' said Vaishnaw. The Economic Survey 2024-25 noted that even though India has increased the gross expenditure on research & development (GERD) from approximately ₹ 60,196 crore in 2011 to about ₹ 127,381 crore in 2021, it still is a mere 0.64% of its GDP. The survey noted that this remains 'insufficient and remains low compared to many countries that have forged ahead in R&D.' A Press Information Bureau release said the government will give ₹ 1 lakh crore to the Anusandhan National Research Foundation (ANRF) as a 50-year interest-free loan. ANRF, a government body set up to boost research and innovation, will create a special fund that offers concessional finance to second-level fund managers, who will then evaluate and select individual projects for funding. In some cases equity investments in startups may also be considered, the PIB release said. Contributions to the Deep-Tech Fund of Funds, announced in Budget 2025, or any other fund of funds meant for RDI may also be considered, the release added. The RDI scheme will be guided by the ANRF governing board, chaired by the prime minister. Its executive council will set guidelines and recommend fund managers and project types. A group of secretaries, led by the cabinet secretary, will approve changes and review progress. The secretary of the relevant sector will be included in the group. For instance, if a project involves AI, the secretary of the IT ministry will be part of the decision-making body. The department of science and technology will be the nodal agency for implementation. Industry insiders described the scheme as transformative. 'DeepTech is the final frontier in the Indian Startup ecosystem. This ( ₹ 1 Lakh crore over 5 years) is a massive commitment from the Government of India to catalyze private sector R&D and deep tech innovation,' said Rajan Anandan, Managing Director at Peak XV Partners and former head of Google in India and Southeast Asia on X. Nikhil Agarwal, managing director, foundation for innovation and technology transfer (FITT), IIT Delhi, said, 'For the first time, our private sector has a real runway to dream bigger, build deeper, and compete globally. This move can transform India from a service-driven economy into a true innovation powerhouse. It's a defining moment for our nation's future.' He pointed out that for young founders building in AI, space, biotech or semiconductors, access to R&D capital has always been the missing link. This scheme fills that gap, he said, calling it a structural reform that re-imagines how India competes globally.
Time of India
a day ago
- Business
- Time of India
Rs 1L cr R&D scheme to boost pvt sector innovation gets nod
New Delhi: The Union Cabinet on Tuesday cleared the Research, Development and Innovation (RDI) Scheme with a financial commitment of Rs 1 lakh crore. Designed to strengthen India's private research and innovation ecosystem, the scheme will provide long-term, low-cost financing to catalyse investment in emerging and strategic sectors. Briefing the media, Union minister Ashwini Vaishnaw described the scheme as a pivotal initiative to drive high-impact R&D, particularly in areas critical to India's economic resilience, strategic autonomy and global competitiveness. The scheme targets the funding shortfall faced by private enterprises working on cutting-edge technologies, offering support through low or zero interest loans and equity funding. The RDI Scheme's objectives include scaling up private sector research in emerging technologies, supporting high technology readiness level projects with transformative outcomes and facilitating access to strategically significant technologies. It also envisages the creation of a 'Deep-Tech Fund of Funds'. The initiative will be steered by the Anusandhan National Research Foundation, with its governing board chaired by the PM. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Switch to UnionBank Rewards Card UnionBank Credit Card Apply Now Undo The executive council will operationalise the scheme by finalising guidelines and selecting fund managers, while an empowered group of secretaries, headed by the cabinet secretary, will monitor performance and approve changes when needed. The science and technology department will serve as the nodal agency for implementation. Funding will be disbursed through a two-tier structure. A special purpose fund within the foundation will hold the corpus, which will then be deployed by selected fund managers to offer concessional financing or equity support, especially targeting start-ups and deep-tech enterprises.
