RDI Scheme: A Complete Guide to India's Rs. 1 Lakh Crore Research Funding Initiative

India's private sector has long faced the same structural gap: brilliant research exists, but the long tenor, low cost capital needed to carry that research from lab to market rarely does. Venture capital wants speed and returns. Banks want collateral and predictability. High TRL, capital intensive R&D, the kind that builds indigenous technology rather than just software products, has historically fallen through the cracks.

The Research, Development and Innovation (RDI) Scheme is the Government of India's direct response to that gap. Approved by the Union Cabinet on July 1, 2025 with a corpus of Rs. 1 lakh crore, the RDI Scheme is designed to provide long term financing or refinancing at low or nil interest rates, specifically to spur private sector investment in research, development, and innovation across strategic and sunrise sectors. It is, by outlay, the largest scheme of its kind India has launched. The government channels that Rs. 1 lakh crore to the Anusandhan National Research Foundation as a 50 year, interest free loan, an unusually patient funding structure that reflects just how long horizon this kind of research financing is meant to be.

The Opportunity: What the RDI Scheme Actually Offers

• A massive, multi year corpus: the scheme carries a total outlay of Rs. 1 lakh crore over six years, including Rs. 20,000 crore allocated for FY 2025 26 alone, signaling serious near term deployment, not just a long term promise.
• Patient, affordable capital: unlike typical venture funding, RDI is structured primarily as long term soft loans, with the possibility of some equity participation, designed for capital intensive, high TRL projects that need longer runway than most private investors are willing to provide.
• Meaningful project financing: financing can cover up to 50 percent of the assessed project cost for transformative RDI projects at Technology Readiness Level 4 and above, with exceptions to this cap approvable by the Empowered Group of Secretaries.
• Top level governance: the Governing Board of the Anusandhan National Research Foundation, chaired by the Prime Minister himself, provides overarching strategic direction to the scheme, a signal of the priority it carries within government.
• Deep tech sector focus: priority areas include biotechnology and life sciences, biomanufacturing and bioengineering, pharmaceuticals and drug development, and medical devices and diagnostics, alongside other strategic and sunrise technology domains tied to India's long term economic and national security interests.
• Deployment through Second Level Fund Managers: rather than running everything through one central desk, RDI funds are disbursed via Second Level Fund Managers, who include Alternative Investment Funds, Development Finance Institutions, Non Banking Finance Corporations, and Focused Research Organisations, investing in eligible technology entities as equity, debt, or a combination of both, and who design their own fund documents, including private placement memorandums and term sheets, aligned to RDI guidelines.
• A companion to India's wider deep tech push: RDI builds on other recent policy moves, including the National Geospatial Policy 2022, Indian Space Policy 2023, and BioE3 Policy 2024, positioning it as part of a coordinated national innovation strategy rather than a standalone initiative.

Who is eligible

• Any legal entity registered and incorporated in India under the Companies Act 2013, the Indian Partnership Act 1932, or the LLP Act 2008, including startups as recognised under DPIIT's official notification.
• Entities with their principal place of business or operations located in India.
• Ventures working on technology at TRL 4 or above, meaning validated components or a working prototype, not just an early concept.
• Startups, MSMEs, established industry players, and research institutions operating in strategic or sunrise sectors.

How the process works

1. Confirm your technology sits at TRL 4 or above and falls within one of RDI's designated strategic or sunrise sectors.
2. Identify and apply through the appropriate Second Level Fund Manager for your sector. RDI funds do not flow through a single central application point.
3. Prepare a Detailed Project Report along with a formal TRL assessment as part of your application package.
4. Once approved, funding is released against defined milestones, structured as long term financing rather than a single lump sum disbursal.

The Institutions Powering the RDI Scheme

The RDI Scheme sits under the Department of Science and Technology but is governed at the highest level by the Anusandhan National Research Foundation, whose Governing Board is chaired by the Prime Minister. Below that sits a network of Second Level Fund Managers who handle actual disbursal, a structure that echoes how the scheme aims to combine top down strategic direction with sector specific, hands on fund management. A dedicated Special Purpose Fund is also being established under the Anusandhan National Research Foundation to serve as custodian of the RDI Fund and support the scheme's execution.

Frequently Asked Questions

Is the RDI Scheme a grant, a loan, or equity funding?

Primarily long term, low or nil interest financing, effectively patient debt, though the scheme also allows for some equity participation depending on the project and sector. It is not a direct grant in the way schemes like TIDE 2.0 are.

What TRL level does my startup need to be at to qualify?

TRL 4 or above, meaning you need validated components or a working prototype, not just a concept or idea stage. This makes RDI a later stage funding option compared to early incubation schemes.

How much of my project cost can RDI actually finance?

Up to 50 percent of the assessed project cost for transformative RDI projects at TRL 4 and above, though exceptions to this ceiling can be approved by the Empowered Group of Secretaries for particularly significant projects.

Do I apply to a central government office, or somewhere else?

Neither directly. RDI funds are disbursed through Second Level Fund Managers, each of whom designs fund specific documentation aligned to RDI guidelines. Identifying the right Second Level Fund Manager for your sector is a key first step.

What sectors does the RDI Scheme prioritise?

Biotechnology and life sciences, biomanufacturing and bioengineering, pharmaceuticals and drug development, and medical devices and diagnostics are explicitly named priority areas, alongside other strategic and sunrise technology domains relevant to India's economic and security interests.

The Bottom Line

The RDI Scheme represents India's largest and most direct attempt to solve a problem private capital has never solved well on its own: financing R&D that is too capital intensive and too long horizon for typical venture money, but too commercially oriented for pure academic grants. For startups, MSMEs, and industry players sitting on validated, high TRL technology in a strategic sector, RDI offers something genuinely rare in India's funding landscape, long tenor, low cost capital at meaningful scale. The practical next step is identifying the right Second Level Fund Manager for your sector and getting your Detailed Project Report and TRL assessment in order before applying.