Cabinet approves Research Development and Innovation (RDI) Scheme

New Delhi: Prime Minister Narendra Modi-led Union Cabinet on July 1, 2025 approved the Research Development and Innovation (RDI) scheme to scale up Research, Development and Innovation in Strategic and Sunrise domains.

Recognising the critical role that the private sector plays in driving innovation and commercialising research the RDI Scheme aims to provide long-term financing or refinancing with long tenors at low or nil interest rates to spur private sector investment in RDI, the government stated.

Key objectives of RDI scheme

The scheme aims to provide long term financing or refinancing for long tenors at low or nil interest rates to spur private sector investment in RDI

Designed to overcome the constraints and challenges in funding of the private sector

Seeks to provide growth and risk capital to sunrise and strategic sectors to facilitate innovation

Governing Board of Anusandhan National Research Foundation, chaired by the Prime Minister, overarching strategic direction to the RDI scheme.

Encourage the private sector to scale up RDI in sunrise domains and in other sectors relevant for economic security, strategic purpose and self reliance

Finance transformative projects at higher levels of Technology readiness levels

Facilitate setting up of a Deep-Tech Fund of funds.

“The RDI Scheme will have a two-tiered funding mechanism. At the first level, there will be a Special Purpose Fund (SPF) established within the ANRF, which will act as the custodian of funds. From the SPF funds shall be allocated to a variety of 2nd level fund managers. This will be mainly in the form of long-term concessional loans. The funding to R&D projects by the 2nd level fund managers would normally be in the form of long-term loan at low or nil interest rates. Financing in the form of equity may also be done, especially in case of startups. Contribution to Deep-Tech Fund of Funds (FoF) or any other FoF meant for RDI may also be considered,” the Cabinet note stated.