PM Modi To Launch ₹1 Lakh Crore Fund To Boost Private Deeptech R&D

Prime Minister Narendra Modi will launch a ₹1 lakh crore Research, Development and Innovation (RDI) scheme on November 3 at ESTIC 2025 in New Delhi. The two-tier fund will channel public capital through second-level managers into private R&D across AI, semiconductors, biotech, energy, space and more, using loans or equity to crowd in corporate and startup investment.

India’s headline announcement of a ₹1 lakh crore RDI scheme on November 3 is a clear policy pivot: for the first time, public capital will explicitly underwrite private-sector R&D at scale. Beyond the cheque size and the fanfare at ESTIC 2025 (Nov 3–5), the deeper story is structural; this fund aims to change incentives, reduce early-stage risk, and rewire how Indian industry invests in deeptech. The move could accelerate commercialisation of research, but success will hinge on execution: fund governance, choice of second-level managers, and rigorous outcome metrics.

Ashok Chandak, President SEMI India and IESA shared his views on the visionary launch of the ₹1 lakh crore Research, Development, and Innovation (RDI) Scheme Fund:

What the fund will do:

• Two-tier structure: The department will not invest directly. Instead, it will work with second-level fund managers—venture capital funds, alternative investment funds, select institutions such as IITs and the Technology Development Board—to channel support.
• Types of support: Funding can take the form of long-term, low-interest loans to corporates or equity injections into startups. There will be no hard upper cap on investments; large companies can apply but must co-invest 50% of the project cost.
• Scope and themes: ESTIC 2025 will focus on 11 priority themes: advanced materials and manufacturing, AI, bio-manufacturing, the blue economy, digital communications, electronics and semiconductors, agri-tech, energy, environment and climate, health and medical technologies, quantum science, and space technologies.
• Why this matters — a practical lens

India’s private R&D share today is roughly 30–35% of total R&D spend, versus about 70% in advanced economies. By offering patient capital and risk reduction, the RDI fund targets that gap directly. Practically, this can:

• Derisk large bets: Corporates may green-light ambitious semiconductor fabs or bio-manufacturing lines if half the project cost and favourable financing are available.
• Accelerate commercialisation: Startups working on lab-scale inventions could access equity and bridging loans to scale pilots into commercial production.
• Nudge strategic sectors: Directed capital for semiconductors, quantum and health tech could shorten lead times on critical capabilities.

How projects might look on the ground

• A medtech startup moving from a prototype to a regulated manufacturing line could receive a structured equity + low-interest loan package that preserves runway while scaling compliance.
• A consortium led by a large Indian conglomerate could win funding for a semiconductor equipment pilot if it matches the required 50% co-investment and demonstrates domestic value creation.
• Universities and tech boards working with industry could transform high-potential white papers into funded testbeds and demonstrators, advancing commercialisation cycles.

Risks and implementation challenges

• Selection and governance: The impact will depend on how second-level managers are chosen and monitored. Poor selection risks capital misallocation to politically connected projects rather than technically viable ones.
• Outcome measurement: Success requires metrics beyond disbursement numbers — patents filed, products commercialised, manufacturing capacity built, jobs created and follow-on private investment.
• Crowding and distortions: Without careful design, public capital could crowd out private investors or encourage moral hazard, where sponsors rely on subsidised financing instead of efficient project design.
• Capacity at scale: Managing a fund of this size through intermediaries will demand institutional capacity and strong oversight to prevent delays and leakage.

Early Signals to Watch in the RDI Fund Rollout

1. List of accredited second-level managers and selection criteria. Quality of managers will determine technician-to-market conversion.
2. First wave of approved projects and sectoral spread. Early winners will reveal strategic priorities and whether funds flow to startups or large corporates.
3. Disclosure and audit mechanisms. Will the programme publish standardised outcomes and allow public scrutiny? CA-level validation of returns was signalled as a welcome transparency move for similar schemes.
4. Co-investment behaviour. How readily will large firms put up 50% of project costs? That will reveal commercial alignment.

The ₹1 lakh crore RDI fund is a policy inflection point: it acknowledges that public money must play a catalytic role to build a private-sector R&D ecosystem at scale. If the government gets the governance, manager selection and outcome metrics right, the fund can move Indian deeptech from lab to factory. If not, it risks being another large programme that distributes capital without measurable commercial or technological returns. For startups, corporates and research institutions, the immediate task is practical: prepare bankable proposals, partnerships and measurable KPIs that meet the fund’s dual goals — innovation and commercialisation.