Union Cabinet Approves ₹1-Trillion RDI Scheme To Boost Private-Sector Innovation

The Union Cabinet on Tuesday approved a ₹1-trillion corpus for the Research Development and Innovation (RDI) Scheme, a landmark initiative aimed at encouraging private-sector investment in strategic and rapidly growing industries through long-term, affordable financing.

Recognising the pivotal role of the private sector in advancing innovation and commercialising research, the government stated that the RDI Scheme will offer long-term loans or refinancing options at minimal or zero interest rates.

This approach seeks to fill critical funding gaps that hinder private investment in ‘sunrise sectors’ such as deep-tech, artificial intelligence, and green technologies, positioning India to better compete globally.

How the RDI scheme works

The scheme operates on two levels:

• The Anusandhan National Research Foundation (ANRF) will set up a Special Purpose Fund (SPF) to manage the ₹1-trillion corpus.
• Fund managers will deploy these resources into specific R&D projects through long-tenure loans or equity investments in startups, ensuring flexible and strategic support.

Additionally, the scheme plans to invest in a ‘Deep-Tech Fund of Funds’, a pooled vehicle to back ventures aligned with innovation priorities.

Budgetary backing & strategic growth

First announced in the Union Budget 2024-25, the RDI Scheme reflects the government’s commitment to boosting India’s research ecosystem.

Finance Minister Nirmala Sitharaman allocated ₹20,000 crore to the Department of Science and Technology (DST) for this purpose.

The DST’s budget has seen remarkable growth, increasing from ₹2,777 crore in 2014 to ₹28,509 crore in FY26.

Likewise, gross research and development expenditure has more than doubled, from ₹60,196 crore to ₹1,27,380 crore in the same period.

With the RDI Scheme, India also aims to catalyse private investment in crucial research areas, enhancing domestic capabilities and fostering sustainable innovation-driven growth.

This strategic fund is expected to accelerate technology acquisition and development, positioning the country as a global competitor in advanced sectors.

This initiative marks a major step towards strengthening India’s innovation landscape by providing stable financial support to emerging industries and promoting a collaborative research environment between the public and private sectors.

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