Union Cabinet Approves ₹1 Lakh Crore RDI Scheme to Boost Private Sector Innovation

In a major initiative to strengthen India’s innovation ecosystem, the Union Cabinet approved the Research Development and Innovation (RDI) Scheme on July 1, 2025, with an outlay of ₹1 lakh crore. The scheme is designed to spur private sector investment in high-impact research and development, particularly in sunrise and strategic sectors, by offering long-term financing at low or nil interest rates. The program will be strategically guided by the Anusandhan National Research Foundation (ANRF), chaired by the Prime Minister.

Why in News?

The approval of the RDI Scheme marks a significant policy move to promote deep-tech innovation, economic self-reliance, and strategic research investment by the private sector. With traditional R&D funding channels often limited for industry players, this scheme provides a transformative financing mechanism to overcome those constraints.

Key Objectives of the RDI Scheme

• Promote private sector-led R&D and innovation in sunrise domains like AI, semiconductors, clean energy, etc.
• Encourage investment in technology acquisition and commercialization.
• Finance high Technology Readiness Level (TRL) projects.
• Support strategic sectors critical for national security and economic competitiveness.
• Establish a Deep-Tech Fund of Funds to stimulate long-term innovation.

Two-Tier Structure

Tier 1 – Special Purpose Fund (SPF)

• Created within the ANRF, this fund will act as the central custodian of funds and allocate capital to second-level fund managers.

Tier 2 – 2nd-Level Fund Managers

• These managers will channel concessional long-term loans to private entities engaged in transformative R&D projects.
• Loans will carry low or nil interest, helping mitigate risk and encourage innovation.

Institutional Oversight

• The ANRF Governing Board, headed by the Prime Minister, will provide strategic direction and supervision.
• The scheme reflects a collaborative model between government and industry for advancing national innovation goals.

Significance of the Scheme

• Unlocks growth and risk capital for private enterprises, especially startups and MSMEs in tech.
• Helps position India as a global innovation hub.
• Strengthens technology self-reliance and supports the Make in India and Atmanirbhar Bharat missions.
• Aligns with India’s goals under the National Deep-Tech Strategy and Vision 2047.