What is the ₹1 Lakh Crore RDI Fund?

India's government has launched one of the nation's most ambitious and transformative initiatives in technological advancement—the Research, Development, and Innovation (RDI) Scheme, formally inaugurated by Prime Minister Narendra Modi on November 3, 2025, at the Emerging Science, Technology and Innovation Conclave (ESTIC 2025). This historic scheme allocates ₹1 lakh crore (approximately USD 12 billion) to revolutionize India's deep-tech ecosystem.​

The RDI Fund operates through the Anusandhan National Research Foundation (ANRF), a specialized institution created to drive India's research and innovation agenda. The fund specifically addresses a critical gap that has existed in India's science system for decades: lack of sustained, long-term financing for high-risk, long-duration research projects that are essential for breakthrough innovations.​

Nodal Department & Implementation

The Department of Science and Technology (DST) serves as the nodal ministry for operationalizing this scheme. The fund operates through a two-tier governance structure:​

Tier 1 (Special Purpose Fund - SPF): Established within ANRF, acting as the first-level custodian of the ₹1 lakh crore corpus.

Tier 2 (Second-Level Fund Managers - SLFMs): Including Alternate Investment Funds (AIFs), Development Finance Institutions (DFIs), and Focused Research Organizations such as BIRAC and IIT Research Parks.​

Notably, the PM-chaired Governing Board of ANRF provides overarching strategic direction to the scheme.​

Focus Areas: Which Technologies Will Receive Funding?

The RDI Fund targets "sunrise sectors" and areas of strategic national importance where India currently lacks indigenous capacity. These include:​

1. Quantum Computing & Quantum Technologies

Quantum processors and quantum gates

Quantum secure communication systems

Quantum hardware design and development

Direct alignment with the National Quantum Mission targeting India's emergence as a global quantum hub by 2030​

2. Semiconductors & Chip Design

Chip design and fabrication technology

Semiconductor manufacturing and ecosystem development

Indigenous semiconductor solutions

Neuromorphic processors and edge AI accelerators

Supports the India Semiconductor Mission (ISM)​

3. Artificial Intelligence (AI)

AI applications tailored to Indian contexts

Precision farming using computer vision and sensors

AI-driven soil and irrigation management

Yield estimation through satellite or drone imagery

Predictive pest and disease models

AI safety, validation frameworks

Indigenous AI chips and accelerators​

4. Other Strategic Sectors

Biotechnology & Genomics

Space R&D (aligned with ISRO's roadmap)

Defense Deep-Tech Innovations

Robotics & Cyber-Physical Systems

Healthcare applications including AI-driven diagnostics

Educational technology solutions

Energy security and storage technologies​

Funding Mechanism: How Will the Money Flow?

The RDI Fund distinguishes itself from traditional grant-based research funding by adopting a "patient capital" approach, meaning it prioritizes long-term returns over immediate gains.​

Forms of Financing Available:​

Coverage & Eligibility:

Financing can cover up to 50% of the assessed project cost for transformative RDI projects at Technology Readiness Levels (TRL) 4 and above​

Exceptions may be approved by the Empowered Group of Secretaries (EGoS)​

Projects must have a minimum TRL 4 rating (i.e., technology validated in lab environment)​

Explicitly Excluded:

Short-term loans and traditional grants are not supported under this scheme—reflecting its emphasis on sustained, strategic investment.​

Who Will Receive the Funding?

The RDI Scheme caters to diverse stakeholders across the innovation ecosystem:​

1. Research Institutions

Frontier Grants to premier institutions like IITs, IISc (Indian Institute of Science)

Support for 8-12 year high-tech research projects that would otherwise face mid-project funding discontinuity

2. Private Sector Companies

Deep-tech startups and scale-ups in quantum, AI, and semiconductor sectors

Applied Research Funds for companies developing commercially viable solutions

Eligibility conditions include:

Incorporation in India (registered and headquartered)

Indian control (controlled by resident Indian citizens per FDI norms)

Ownership and registration of all IP in India​

3. Young Innovators

High-Risk Project Support for innovators under 35 years of age

Encourages fresh entrepreneurship in deep-tech domains

4. Public-Private Collaboration:

The scheme emphasizes synergy between academia, research labs, and industry, enabling collaborative development of deep-tech solutions.​

Expected Impact: Three Major Transformations

India's technology landscape is set for transformative change through three key outcomes:

1. Elimination of Mid-Project Funding Gaps

Long-duration research projects (8-12 years) that often face discontinuous funding will now receive sustained financial support, enabling researchers to pursue bold, transformative ideas without fiscal interruption.​

2. Public-Private Collaboration in Deep-Tech

Companies and research labs will collaborate more closely to convert fundamental research into commercially viable deep-tech products, accelerating the journey from laboratory to market.​

3. India Shifts from Consumer to Creator

India's role in quantum computing, AI, and semiconductors will evolve from being a consumer of technology to becoming a manufacturer, innovator, and exporter. This shift aligns with the broader Atmanirbhar Bharat (Self-Reliant India) vision.​

How Does This Compare Globally?

India now enters an exclusive club of deep-tech leaders. Currently, three nations dominate the global deep-tech landscape: the United States, China, and Europe. With the RDI Fund, India is taking its first decisive seat at the table of global technology leadership, signaling that it is no longer a follower but an aspiring co-creator of future technologies.​

This move aligns India with similar initiatives:

United States: DARPA and substantial federal R&D budgets

China: Heavy state investment in semiconductor and quantum research

European Union: Horizon Europe and coordinated tech investment strategies

The RDI Fund represents India's competitive response to global innovation races in strategic technologies that will define the next decade of economic and geopolitical power.​

Key Government Funding Projections

The Anusandhan National Research Foundation (ANRF) aims to mobilize ₹50,000 crore during 2023–2028 through multiple streams:​

₹14,000 crore from Central Government budget

₹36,000 crore from non-governmental sources (industry contributions, philanthropic support, and private investment)

This structure reflects a public-private partnership model, multiplying the fund's impact beyond just government allocation.​

National Missions & Strategic Alignment

The RDI Fund directly supports three major national missions:​

This alignment ensures that private innovation directly contributes to India's long-term strategic autonomy and technological sovereignty.​

Intellectual Property (IP) & Foreign Investment Safeguards

A critical feature of the RDI Fund is its emphasis on IP localization. All intellectual property developed through RDI-funded projects must be:

Registered in India

Owned by Indian entities

Retained within India​

This provision ensures that India doesn't become a hub for R&D that exports value outside the country. It aligns with broader Atmanirbhar Bharat goals and prevents "brain-drain" of innovations.​

Investee companies must maintain Indian headquarters and control, with foreign investment limited to the extent permitted under existing FDI norms.​

Why This Matters for Your Exam Preparation

For UPSC Prelims:

Science & Technology (GS-3): The RDI Scheme is a direct addition to your current syllabus. Expect questions on: scheme objectives, funding mechanisms, eligible sectors, governance structure (ANRF), implementation timeline, and how it differs from previous R&D initiatives.

Key terms to memorize: TRL (Technology Readiness Level), SPF (Special Purpose Fund), SLFM (Second-Level Fund Manager), ANRF, DST (nodal ministry).

Likely question formats:

"Which ministry is the nodal agency for the RDI Scheme?"

"The RDI Fund covers how much corpus?"

"Which sectors are NOT covered under the RDI Scheme?"

For UPSC Mains (Essay & Descriptive Answers):

GS-3 (Technology & Innovation): Write comprehensive answers on India's positioning in deep-tech sectors, the role of government financing in private R&D, and how the RDI Fund addresses historical funding gaps in research.

Potential essay topics: "India's pathway to technological self-reliance," "Deep-tech innovation and national security," "Public-private partnerships in India's innovation ecosystem."

Case study angle: Compare India's RDI Fund with similar initiatives in the US, China, and EU to argue India's strategic positioning.

For Other Competitive Exams:

IFS, IPS, GATE, and research-oriented exams will test understanding of quantum computing, semiconductor manufacturing, and AI applications—all core RDI focus areas.

Broader Strategic Context:

The RDI Scheme reflects India's shift from a services-driven economy to an innovation-driven economy. It demonstrates:

Technological sovereignty against global dependencies

Strategic autonomy in critical sectors (semiconductors, quantum, AI)

National security interests (defense deep-tech, cybersecurity)

Economic competitiveness in trillion-dollar global tech markets

Understanding this scheme helps aspirants grasp India's long-term strategic priorities, a critical theme in UPSC's GS-2 (Governance) and GS-3 (Technology & Economy) papers.

Final Takeaway

The ₹1 lakh crore RDI Fund is not merely a fiscal allocation—it is a strategic declaration of intent to transform India into a global deep-tech powerhouse. For exam aspirants, mastering this topic opens doors to understanding India's contemporary innovation policy, technological ambitions, and positioning in an increasingly tech-defined world order.

Stay updated on RDI Fund implementations and policy announcements for next-level exam preparation.

Prepared by: Atharva Examwise
Last Updated: November 18, 2025
Category: Current Affairs | Science & Technology | UPSC
Difficulty Level: Moderate to Advanced