India's New RDI Fund for Technological Advancement

RESEARCH DEVELOPMENT AND INNOVATION (RDI) FUND LAUNCHED FOR HIGH-IMPACT PROJECTS

The Government of India has launched a groundbreaking ₹1 trillion Research, Development, and Innovation (RDI) Fund to boost private-sector-led research, technological advancement, and innovation. The initiative aims to support high-risk, high-impact projects that can accelerate India’s transition into a global innovation hub and strengthen its technological self-reliance.

1. What is the RDI Fund announced by the Prime Minister?

The RDI Fund is a strategic financing mechanism designed to promote research and innovation across key sectors. It focuses on projects that involve high risk but promise significant long-term value, with the objective of driving national competitiveness and technological leadership.

2. Who will manage and implement the RDI Fund?

The Department of Science and Technology (DST) will act as the nodal ministry. The fund will be managed by the Anusandhan National Research Foundation (NRF) under a two-tier structure to ensure transparency and professional oversight.

3. How is the two-tier operational structure designed?

• Level I: A Special Purpose Fund (SPF) under the Anusandhan NRF will serve as the principal custodian of the capital.
• Level II: Funds will be disbursed through professional fund managers, including Alternate Investment Funds (AIFs), Development Finance Institutions (DFIs), Non-Banking Financial Companies (NBFCs), and Focused Research Organisations (FROs).

4. What are the financing modes under the RDI Fund?

The RDI Fund will support research through a range of financing instruments rather than traditional grants:

• Long-term, low or zero-interest loans.
• Equity infusions, particularly targeting deeptech startups.
• Allocations to India’s DeepTech Fund of Funds.
• No short-term loans or direct grants will be provided.

5. Which sectors will receive priority funding?

The fund will prioritize critical and emerging technologies such as:

• Energy security and transition
• Quantum computing
• Robotics and automation
• Space technology
• Biotechnology
• Artificial Intelligence (AI)

6. How does the RDI Fund differ from earlier research funding schemes?

Unlike traditional government grant models, the RDI Fund emphasizes repayable, long-term support and equity-based financing. It shifts the focus from bureaucratic approvals to creating an ecosystem that promotes the ease of doing research for private players and innovators.

7. What did the Prime Minister highlight about the initiative?

The Prime Minister emphasized that, for the first time, substantial capital is being allocated to high-risk, high-impact innovation projects. He noted that India stands at the cusp of a technological revolution, and the RDI Fund will play a pivotal role in shaping the country’s innovation-driven future.

8. How has the startup community responded?

The startup and venture capital ecosystems have welcomed the initiative, calling it a transformative step in building India’s innovation capital framework. Industry leaders view the fund as a catalyst for greater public-private collaboration in research and technology development.

9. What are the expected long-term benefits of the RDI Fund?

• Accelerating India’s journey toward technological self-reliance.
• Attracting greater private investment in research and innovation.
• Creating high-value intellectual property and new-age industries.
• Positioning India as a global hub for innovation and R&D.

10. Which institutions will play a role in implementation?

Key implementing institutions include the Technology Development Board (TDB), Biotechnology Industry Research Assistance Council (BIRAC), and IIT Research Parks. These organizations will help identify, finance, and monitor high-potential projects under the RDI framework.

Conclusion

The RDI Fund represents a paradigm shift in India’s approach to research financing. By enabling private-sector participation and supporting deeptech innovation, the initiative is poised to redefine India’s scientific and economic landscape for decades to come.