Govt picks 19 fund managers for ₹1 trillion RDI scheme

The approval creates a distribution network for the government’s ₹1 trillion Research, Development and Innovation Fund. Instead of sending all the money directly to startups, the government will work through 19 selected second-level fund managers. Their job is to identify promising companies and research projects, then provide capital for new technologies.

The first cohort includes 14 alternative investment funds and five focused research organisations. The organisations include IIT research parks and specialist technology platforms. Funding can reach companies through low-interest loans or equity investments. The approved commitments total ₹7,131 crore.

This is an important operating step, but it is not the full corpus being released at once. It gives private investors and research organisations a defined route to channel public money into high-risk technology. The fund’s stated purpose is to support big-ticket investments in cutting-edge technology firms, especially those needing longer development timelines.

A second-level fund manager is an intermediary chosen to receive money from the government’s RDI Fund. It does not simply hold that money. It evaluates startups and companies developing new technologies, then deploys capital to support their work. This arrangement lets the government use specialised investors and research organisations to reach technology ventures.

The money can be provided in two main ways: low-interest loans or equity investments. Approved managers include alternative investment funds, non-banking financial companies and focused research organisations, such as IIT research parks. In this first cohort, the government approved 14 AIFs and five FROs.

The model matters because technology projects can need both financial expertise and technical guidance. The selected managers can channel capital toward companies and research areas they understand. The government committed ₹7,131 crore through these managers, while the overall RDI Fund has a ₹1 trillion corpus.

The first cohort carries ₹7,131 crore in approved RDI Fund commitments. Against the scheme’s total ₹1 trillion corpus, that equals roughly 7.1%, using ₹1 trillion as ₹100,000 crore. This makes the initial commitment meaningful, while showing that it represents only a portion of the government’s planned funding capacity.

The money will flow through 19 selected second-level fund managers. Fourteen are alternative investment funds, and five are focused research organisations. They can support technology companies through low-interest loans or equity investments. This structure spreads the first commitment across specialist investors and research bodies rather than placing it with one institution.

The remaining corpus leaves room for additional cohorts or later commitments, although the article does not specify their timing or size. The immediate significance is that the RDI scheme has moved from a broad ₹1 trillion promise to an approved deployment channel worth ₹7,131 crore.

The potential change is better access to patient, long-term capital. Industry stakeholders say high-risk research has long struggled to attract private investment. Deeptech companies often take years to move from a laboratory to a marketable product, making them difficult for investors seeking faster returns. The RDI Fund directly targets that financing gap.

Its mechanism is indirect but practical. Government money goes to selected funds and research organisations, which then invest in or lend to technology companies. Shweta Rajpal Kohli said this could give private investors more confidence to back deeptech alongside public capital. The 19 approved managers create the first channel for that approach.

The effect will depend on how managers deploy the ₹7,131 crore commitment. The approval does not guarantee that every startup will receive funding or that projects will succeed. It does, however, establish a government-backed route for emerging and strategic technologies that may otherwise struggle to attract sustained investment.

“Patient capital” means money that can remain invested while a company develops over a long period. Deeptech firms often begin with research rather than a ready product. Their work can involve difficult technical problems, testing and development before commercial sales become possible. The article says these companies take years to move from the lab to the market.

That timeline creates a mismatch with shorter-term funding. Investors may want quicker evidence of growth, while a research-led company may need more time before it can show commercial results. The article also describes deeptech research as high risk and says private investment in emerging and strategic technologies has long been limited.

The RDI Fund is designed to address that mismatch by routing capital through funds and research organisations. They can provide low-interest loans or equity. Shweta Rajpal Kohli said this approach could give private investors greater confidence to support deeptech alongside government-backed money.

The selection process was designed as several checks rather than a single decision. Applications underwent detailed objective assessment and in-person interactions with an Expert Advisory Committee. Proposals then went to the Executive Council of the Anusandhan National Research Foundation, or ANRF, before reaching the Empowered Group of Secretaries for final consideration and approval.

That structure is intended to add expert review, administrative oversight and a documented decision path. The government also said a comprehensive conflict-of-interest policy was in place at the Technology Development Board. These measures are meant to identify concerns and strengthen confidence in funding decisions.

However, the process faced scrutiny because an Indian Express investigation alleged that 15 of the 22 startups funded in the first tranche had links to seven selection committee members. The allegation raised potential conflict-of-interest concerns. The article does not report a final finding on those allegations, but the issue remains part of the scheme’s public context.

Deeptech is not defined in one sentence in the article, but here it means companies developing advanced, research-heavy and cutting-edge technologies. The article connects these firms with emerging and strategic technology areas, research organisations and the journey from a laboratory to the market. Their value depends heavily on scientific or engineering progress.

Turning research into a commercial product is a long process. A company must develop the technology, demonstrate that it works and move it beyond the lab toward market use. The article says deeptech founders can take years to make that transition. High technical risk also means that progress may be uncertain, even when the underlying research is promising.

That combination creates a financing challenge. Investors may be reluctant to wait through lengthy development, while companies need capital before commercial returns arrive. The RDI Fund aims to help through selected funds and research organisations, using loans or equity to support these longer technology journeys.