RDI scheme: Government aims to ‘jumpstart India’s R&D ecosystem’; offer low-interest funding for startups
India’s newly approved Research Development and Innovation (RDI) scheme, with a massive Rs 1 lakh crore corpus, is set to provide a major boost to private sector R&D and deep-tech startups by making long-term, affordable financing accessible for high-impact innovation projects, a senior government official said.The scheme, approved by the Union cabinet on July 1, is designed to ease funding constraints and foster a robust domestic innovation ecosystem.A senior government official cited by news agency PTI said that the RDI scheme is structured to help companies access long-term, low or nil-interest financing for high-risk, high-tech research projects. The initiative will also support equity-based funding for startups and facilitate the creation of a deep-tech Fund of Funds.The corpus will be managed through a Special Purpose Fund under the Anusandhan National Research Foundation (ANRF), with Rs 20,000 crore already allocated in the Union Budget for FY26. The government will provide a 50-year interest-free loan to the fund, which will further allocate capital to second-level fund managers, including AIFs, NBFCs, and Focused Research Organisations.The official further said that the aim is to help India “jumpstart its R&D ecosystem” by creating a mechanism where ministries can propose relevant technologies for inclusion under the scheme. “Any ministry that wants a technology included under the scheme can send a proposal to the department of science and technology,” the official added.The department of science and technology will act as the nodal agency for implementation and will issue detailed operational guidelines. These will include provisions to ensure effective capital recycling so that private sector RDI efforts continue to receive support over time.India currently spends just 0.65% of its GDP on R&D, significantly below the global average of 2.7%, and far lower than countries like Israel (6.3%) and South Korea (5%). According to officials, one of the key objectives is to change the perception in the private sector that R&D is a cost rather than an investment.Union minister Ashwini Vaishnaw said the scheme will also fund transformative, higher technology readiness projects, and assist in acquiring critical or strategically significant technologies. “By addressing the critical need of the private sector for long-term, affordable financing, the RDI Scheme fosters self-reliance and global competitiveness,” he stated.The scheme will be overseen by multiple layers of governance. The governing board of ANRF, chaired by the Prime Minister, will provide strategic direction. An Executive Council under ANRF will approve project scopes and second-level fund managers. Meanwhile, an empowered group of secretaries headed by the cabinet secretary will periodically review the scheme’s performance and recommend changes.Officials stressed that selected fund managers will include experts from industry, academia, finance, and technology sectors, ensuring that project evaluations remain independent and effective.Launched under the broader umbrella of Startup India, the RDI scheme adds another critical layer to India’s ambition to become a global innovation powerhouse by 2047.
