In a major boost to India’s science and technology ecosystem, the Government of India has launched a ₹1 lakh crore Research, Development and Innovation (RDI) Fund. The announcement was made by Prime Minister Narendra Modi on 3 November 2025 during the Emerging Science, Technology and Innovation Conclave (ESTIC 2025).
The new RDI scheme aims to create a strong link between research, industry, and innovation – helping India become a global leader in deep-tech and high-value manufacturing by 2047.
Why was the RDI Fund launched?
India has been spending less than 1% of its GDP on research and development, compared to 2–3% in countries like the US, China, and South Korea. Most of India’s R&D funding also comes from the public sector, while private sector investment has remained limited.
The RDI Fund is meant to change this. It will encourage private sector participation by offering long-term, low-interest financing or equity support to innovation-driven projects. The idea is to move beyond small government grants and instead create a large pool of patient capital that supports transformative ideas.
How will it work?
The fund will be managed through a two-tier system:
- Special Purpose Fund (SPF) – created under the Anusandhan National Research Foundation (ANRF), which will be the main body managing the corpus.
- Second-Level Fund Managers (SLFMs) – professional institutions such as Alternative Investment Funds (AIFs), Development Finance Institutions (DFIs), or NBFCs, who will select and finance specific projects.
The financing will be available only for projects that are at Technology Readiness Level 4 or above – meaning they are ready to move from lab testing to real-world application. The fund can cover up to 50% of a project’s total cost, focusing on initiatives that show potential for large-scale innovation or commercialization.
Key focus areas
The RDI Fund will support cutting-edge sectors that are critical for India’s economic and strategic growth. These include:
- Artificial Intelligence (AI) and Deep Tech
- Semiconductors and Advanced Manufacturing
- Space and Robotics
- Biotechnology and Health Tech
- Energy Transition and Climate Solutions
- Digital Economy and Agriculture Tech
Why it matters
This is the first time India is using a structured, investment-based model to fund R&D. Instead of short-term grants, it offers a long-term approach similar to how innovation is financed in advanced economies.
It will help startups and research institutes bridge the “lab-to-market” gap, where many Indian innovations fail due to lack of funding for scaling or commercialization. It also aligns with India’s vision of becoming “Atmanirbhar” – self-reliant in technology and manufacturing.
Challenges ahead
Effective implementation will be key. Ensuring transparency in how funds are allocated, selecting capable fund managers, and creating mechanisms to measure outcomes will determine the scheme’s success.
The Big Picture
The RDI Fund represents a historic shift in India’s science and innovation policy – from government-led research to a public-private partnership model driven by technology, capital, and collaboration. If executed well, it could transform India’s innovation landscape and position the country as a global hub for advanced technology by 2047.
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