The Indian government has greenlit the ambitious ₹1 lakh crore Research, Development, and Innovation (RDI) Scheme, a transformative initiative to supercharge private sector-led research in strategic and sunrise technologies. Approved by the Union Cabinet on July 1, 2025, and announced by the Ministry of Science and Technology, the scheme allocates an initial ₹20,000 crore to the Department of Science and Technology (DST) to kickstart operations, following its unveiling in the Interim Budget 2024-25. For innovators, startups, and policymakers searching India RDI scheme 1 lakh crore, private sector R&D fund 2025, or deep tech innovation budget, this corpus—spanning six years—promises low-cost financing and risk capital for high-impact projects, targeting self-reliance in AI, semiconductors, quantum computing, and biotech. With a two-tier structure involving fund-of-funds and direct investments, it could unlock ₹1.5 lakh crore in total leverage, fostering an ecosystem for next-gen breakthroughs.
The scheme builds on the Anusandhan National Research Foundation (ANRF), aiming to bridge the R&D investment gap where India’s private sector contributes just 37% of the 0.7% GDP spend.
Scheme Structure: Two-Tier Mechanism for Scalable Funding
The RDI Scheme operates via a hybrid model to minimize government risk while maximizing private participation, with ₹1 lakh crore over six years (₹20,000 crore for FY26). It follows a fund-of-funds approach, channeling resources through second-level managers for diversified exposure.
Key components:
- Tier 1 (Fund-of-Funds): DST invests in Category-I Alternative Investment Funds (AIFs) focused on deep tech, providing equity and debt to startups and companies.
- Tier 2 (Direct Investments): Selective direct funding for high-TRL (Technology Readiness Level) projects in priority domains.
- Deep Tech FoF: A dedicated sub-fund for AI, semiconductors, quantum, and biotech, catalyzing startups with affordable capital.
Economic Affairs Secretary Ajay Seth confirmed: “The scheme will follow a two-tier mechanism, with the department financing through second-level fund managers.” Implementation begins November 2025, with a Cabinet note detailing focus areas imminent.
| Component | Allocation (₹ Cr) | Mechanism | Focus Areas |
|---|---|---|---|
| Initial Corpus | 20,000 (FY26) | DST-Led FoF | Deep Tech & Sunrise |
| Total Outlay | 1,00,000 (6 Years) | Tier 1: AIF Investments | AI, Semiconductors, Quantum |
| Leverage Potential | 1.5 Lakh Cr | Tier 2: Direct Funding | Biotech, Advanced Materials |
Objectives: Catalyzing Private R&D for Strategic Autonomy
India’s R&D spend lags at 0.7% of GDP (vs. 2-4% in developed nations), with private sector contribution at a mere 37%. The RDI Scheme addresses this by incentivizing innovation in mission-critical areas, aiming to create 1,000+ startups and 10,000 jobs in five years.
Core goals:
- Boost Private Investment: Affordable loans and risk capital for TRL 4+ projects, reducing failure costs.
- Deep Tech Acceleration: FoF for high-risk sectors, with government backing 20-30% of equity.
- Ecosystem Building: Partnerships with IITs, incubators, and global VCs for mentorship and scaling.
DST Secretary Abhay Karandikar highlighted: “This will drive original research, enhancing India’s tech sovereignty.” It complements ANRF’s ₹50,000 crore corpus, with ₹36,000 crore from non-government sources.
Implementation Roadmap: From Approval to Disbursal
Post-Cabinet nod, the scheme rolls out in phases:
- Q3 2025: Finalize guidelines, appoint CEO (private sector technologist).
- November 2025: Operational launch; first calls for proposals.
- FY26: ₹20,000 crore disbursal via AIFs; pilot investments in 50 projects.
- Monitoring: DST-led oversight with performance metrics for fund managers.
A Deep Tech Fund-of-Funds will catalyze startups, with Sitharaman allocating funds in Budget 2025-26 to explore next-gen innovations.
Challenges and Criticisms: Execution and Equity Gaps
While ambitious, hurdles include:
- Private Buy-In: Skepticism on returns in high-risk deep tech; government guarantees needed.
- Bureaucratic Delays: Past schemes like ANRF faced rollout lags.
- Equity Focus: Ensuring benefits reach SMEs, not just conglomerates.
Scientists like those at Insights on India praise the scale but urge “robust governance to avoid misallocation.”
Conclusion: RDI Scheme’s Bold Bet on India’s Innovation Future
The ₹1 lakh crore RDI Scheme isn’t just funding—it’s a catalyst for private-led R&D, potentially transforming India into a deep tech powerhouse. With November debut looming, it promises strategic autonomy amid global rivalries. For startups and researchers, it’s a golden opportunity; for the nation, a leap toward 1%+ GDP R&D spend. Will execution match ambition? The first investments will tell.
