Relevance for UPSC: GS Paper III – Science & Technology, Economy, Innovation & R&D Governance

India has entered a decisive phase in its innovation journey. With the launch of the Research, Development and Innovation (RDI) Scheme, backed by a ₹1 lakh crore fund, the country is setting the stage for a transformation from a grant-driven to a private-led research economy. This initiative underscores India’s intent to become a global innovation hub, combining science, technology, and entrepreneurship to drive sustainable and inclusive growth.

India’s Rising Innovation Landscape

In the past decade, India’s Gross Expenditure on Research and Development (GERD) has nearly doubled — from ₹60,000 crore in 2010–11 to over ₹1.27 lakh crore in 2020–21. Annual patent filings have tripled between 2020–21 and 2024–25, reflecting a sharp rise in indigenous innovation.

These milestones signal a major shift — from a predominantly government-funded R&D ecosystem to one that increasingly draws strength from private enterprises, start-ups, and universities. The RDI Scheme aims to accelerate this transition by providing long-term, low-cost financing to catalyse private investment in research and deep technology.

RDI Scheme (Research, Development & Innovation Scheme)

The RDI Scheme, launched by the Government of India in July 2025 with a ₹1 lakh crore corpus, aims to boost private sector participation in high-impact R&D across strategic and sunrise sectors.

Key Objectives:

• Promote private investment in R&D and deep-tech innovation.
  
• Support projects at higher Technology Readiness Levels (TRLs).
  
• Enable acquisition of strategic technologies.
  
• Strengthen India’s deep-tech funding ecosystem.
  

Funding Mechanism:

• A Special Purpose Fund under the Anusandhan National Research Foundation (ANRF) manages resources.
• Funds are distributed through professional fund managers, including alternative investment funds, development finance institutions, non-banking financial companies, and financial research organisations.
• Support is provided mainly through long-term, low-interest loans and equity funding for startups.

Targeted Sectors: Energy security, Artificial Intelligence, deep technologies, biotechnology, pharmaceuticals, medical devices, and the digital economy. The Department of Science and Technology (DST) is the nodal agency for implementation.

Complementary Policy Ecosystem

The RDI Scheme complements a robust policy framework already in motion:

• Anusandhan National Research Foundation (ANRF): Allocating ₹50,000 crore (2023–28) to strengthen research collaboration between academia, industry, and government.
  
• Indian Space Policy 2023 and IN-SPACe: Opening India’s space sector to private players and start-ups.
  
• National Geospatial Policy 2022: Enabling innovation in mapping, navigation, and data-driven services.
  
• BioE3 Policy 2024: Advancing the bioeconomy through biomanufacturing, bio-AI hubs, and green industrialisation.
  
• Atal Innovation Mission 2.0 (2023–2028): Expanding innovation ecosystems in schools, start-ups, and MSMEs with an outlay of ₹2,750 crore.
  

Together, these initiatives form a complete innovation architecture, from early-stage research to market-ready deployment.

National Missions Driving the Frontier

India’s RDI ecosystem is now powered by several targeted national missions:

• National Quantum Mission: ₹6,000 crore to advance quantum computing, communication, and materials science.
  
• National Supercomputing Mission: Building indigenous high-performance computing capabilities.
  
• National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS): Creating 25 technology hubs in AI, robotics, IoT, and cybersecurity.
  
• IndiaAI Mission: ₹10,000 crore to establish AI compute infrastructure (38,000 GPUs) and national AI innovation centres.
  
• India Semiconductor Mission: ₹76,000 crore under the PLI framework to boost chip design, manufacturing, and packaging.
  
• Deep Ocean Mission: Developing marine technology for sustainable blue economy.
  

These missions together represent India’s strategic leap into deep science-led growth — from the ocean floor to outer space.

Why India Is Ready for a Research Revolution

India’s Digital Public Infrastructure (DPI) — built on platforms like Aadhaar, UPI, CoWIN, and DigiLocker — provides a unique foundation for scalable innovation. It enables real-time data exchange, secure citizen participation, and seamless collaboration between research institutions and industries.

This digital backbone, coupled with a growing start-up ecosystem and demographic dividend, makes India one of the few nations capable of democratising innovation at scale.

Challenges Ahead

1. Private Investment Lag: Despite strong public funding, private sector R&D spending remains below 40% of total expenditure, far lower than in major economies.
   
2. Skill and Talent Gaps: India needs more advanced researchers, domain specialists, and skilled technicians in frontier technologies.
   
3. Research Commercialisation: Many research projects still fail to transition into viable commercial ventures due to limited industry linkages.
   
4. Regulatory Agility: Rapid innovation in biotechnology, AI, and data-intensive sectors requires faster, transparent regulatory frameworks.
   
5. Balanced Federal Innovation: R&D must expand beyond established corridors to Tier-II and Tier-III cities for truly inclusive growth.
   

Important Terms Explained

• GERD (Gross Expenditure on R&D): The total national spending on research, both public and private.
  
• Deep-Tech: Science-intensive innovation areas such as AI, quantum, semiconductors, and synthetic biology.
  
• Technology Readiness Level (TRL): A scale from 1–9 used to measure how close a technology is to full market deployment.
  
• Digital Public Infrastructure (DPI): Shared digital platforms that provide secure and scalable services (like UPI and Aadhaar).
  
• Anusandhan National Research Foundation (ANRF): Apex body for research funding and coordination across public and private sectors.
  
• Fund of Funds: A financing model that invests in multiple venture capital funds to diversify risk and expand support to start-ups.
  

Key Takeaways

• The ₹1 lakh crore RDI Scheme marks a historic pivot towards private-led, innovation-driven growth in India.
  
• Supported by a comprehensive policy stack — from ANRF to AIM 2.0 — it seeks to link research, industry, and global competitiveness.
  
• India’s focus on deep technologies and digital infrastructure makes it well placed to lead in frontier sectors.
  
• The success of this model will depend on talent development, regulatory clarity, and private sector participation.
  
• With this foundation, India is positioning itself not only as a consumer of technology but as a global producer of innovation.
  

One-Line Wrap

India’s new RDI push signals a confident step toward a future where innovation, not imitation, drives the nation’s economy.

UPSC Mains Question

“Discuss how India’s ₹1 lakh crore Research, Development and Innovation (RDI) Scheme can transform the country into a global innovation hub. What challenges must be addressed to ensure inclusive and sustainable R&D growth?”