India's RDI bet: Tech backbone for Viksit Bharat 2047

The Scheme aims to boost private sector R&D with long-term funding, accelerating innovation in emerging tech like semiconductors, AI, telecom, and quantum.

- BY DR JAIJIT BHATTACHARYA

In July 2025, the Union Cabinet approved a Rs 1 lakh crore Research, Development and Innovation (RDI) Scheme aimed at strengthening India's innovation ecosystem. The primary objective is to provide long-term, low-interest financing that can catalyse private sector investment in R&D, especially in strategic and emerging technology areas. This policy move comes at a time when India's Gross Expenditure on R&D (GERD) remains low at around 0.64% of GDP, far behind countries like the US and China, where R&D investment ranges between 2.5% and 3.5% of GDP. Compounding this gap is the limited share of private industry in R&D, which accounts for just about 36% of total R&D expenditure, far below global benchmarks.

The RDI Scheme seeks to reverse this trend by providing patient capital at scale, specifically to support high Technology Readiness Level (TRL) projects and strategic technology development. Through a 50-year, interest-free loan extended to the Anusandhan National Research Foundation (ANRF), the scheme intends to address the "valley of death" in innovation, where promising research often fails to progress from prototypes to market because of limited risk capital and insufficient industry co-funding.

CATALYSING AN ATMANIRBHAR TECH ECOSYSTEM

If deployed effectively, the RDI Scheme could raise India's Gross Expenditure on R&D (GERD) significantly over the next two decades. Based on India's current GERD of roughly Rs 1.3 lakh crore annually, the RDI corpus deployed over 5–10 years equates to an annual addition of Rs 10,000–20,000 crore. This scale of funding, when combined with expected private co-investment and crowd-in effects, could raise overall R&D expenditure by an estimated 15–25%. The increase reflects not just the direct public outlay but also the catalytic effect on industry, academia, and venture capital participation.