India is set to raise its research and development (R&D) expenditure to nearly 2 percent of gross domestic product, more than triple the current level. This ambitious move is part of a government strategy to accelerate innovation by inviting private enterprises to tap into a dedicated Rs 1 lakh crore Research, Development & Innovation Fund (RDIF), which offers partial underwriting of project costs.
According to a senior government official, private firms can receive funding for up to 50 percent of their R&D project expenses through the RDIF. The fund is designed to reduce entry barriers for businesses by sharing initial risks without requiring collateral and providing financing over a span of 10 to 15 years. It is open not only for homegrown innovation but also for acquiring advanced technologies from abroad.
The RDIF aims to prioritize cutting-edge and transformative research over routine development, focusing on sectors crucial for India’s future. These include energy security and transition, climate action, quantum computing, robotics, space technologies, artificial intelligence with applications in agriculture, health, and education, as well as biotechnology, pharmaceuticals, medical devices, and the digital economy.
Industry leaders highlight that this fund signals India's transition from a technology consumer to a technology creator. Emerging areas like AI, semiconductors, green hydrogen, defense, and deep technology are seen as vital for maintaining the country's competitive edge on the global stage.
The government’s approach encourages reinvestment of the fund’s returns, potentially expanding its capacity to support even more innovation projects. This financial backing aims to foster substantial advancements in “deep tech” and strategic sectors that are expected to shape India's economic and technological landscape in the coming years.