Funding Innovation: Unlocking Opportunities Under India’s RDI Scheme
Introduction
The Research, Development, and Innovation (RDI) Scheme is a landmark initiative by India’s Department of Science & Technology (DST), launched in July 2025. Approved with a huge budget of ₹1 lakh crore (around USD 12 billion), this scheme is designed to boost private sector investment in strategic and emerging technology areas. It aims to make India self-reliant in advanced technologies and globally competitive.
Background
India has traditionally relied on grants and small-scale funding for research and innovation. However, high-risk projects, especially in deep-tech fields, often face difficulties in securing long-term investment. The RDI Scheme addresses this gap by providing structured finance and encouraging private sector participation in high-impact projects.
Purpose and Vision
- Encourage private investment in advanced research and innovation.
- Support projects at Technology Readiness Level (TRL) 4 or higher, ready for market testing and scaling.
- Reduce dependence on imported technologies and strengthen India’s strategic capabilities.
- Promote long-term growth and commercialization of deep-tech innovations.
Key Objectives
- Encourage Private Sector Participation: Support research and innovation in sectors like AI, quantum computing, biotech, space, robotics, energy, digital economy, health technologies, and climate solutions.
- Finance High-TRL Projects: Focus on projects ready for pilot testing and commercialization rather than early-stage lab research.
- Support Technology Acquisition: Facilitate access to critical technologies, reducing foreign dependency.
- Establish Deep-Tech Fund of Funds: Pool investments for startups and research-intensive ventures through expert fund managers.
Funding Structure and Mechanism
The RDI Scheme follows a two-tier funding model:
- Tier 1: Special Purpose Fund (SPF) - Managed by the Anusandhan National Research Foundation (ANRF), chaired by the Prime Minister, overseeing the ₹1 lakh crore corpus.
- Tier 2: Second Level Fund Managers (SLFMs) - Specialized fund managers invest directly in eligible projects and startups, providing expert oversight.
Modes of Financing
- Long-term Concessional Loans: Low or zero interest rates for high-risk projects.
- Equity Investments: Providing risk capital for startups.
- Deep-Tech Fund of Funds Contribution: Catalyzes private investment in next-generation technologies.
Eligibility and Project Focus
Projects must be TRL 4 or above, demonstrating proof-of-concept and market potential. Priority sectors include:
- Energy and climate solutions
- Artificial intelligence
- Quantum computing and robotics
- Biotechnology and medical devices
- Space and defense technology
Governance and Oversight
Managed by ANRF and guided by its Executive Council, the scheme ensures alignment with national priorities, transparency, and accountability. Regional councils identify local innovation needs and foster ecosystem growth.
Impact and Future Outlook
The RDI Scheme moves India from grant-based funding to structured private-sector financing, reducing risk for investors and encouraging long-term innovation. Experts expect a multiplier effect, generating at least ten times the government investment from private sources. It strengthens India’s economic and strategic independence while promoting global competitiveness.
Conclusion and Recommendations
The RDI Scheme is a game-changer for India’s innovation ecosystem. By providing sufficient credit facilities, promoting private equity participation, and supporting long-term growth, it allows startups and firms to scale high-impact projects and commercialize transformative technologies.