Funds awaited, Government showpiece deep-tech initiative hits pause

Funds awaited, Administration showpiece deep-tech initiative hits pause The capital has to be allotted by the Department of Science and Technology (DST).

Key points

• 5 min read New Delhi Sep 30, 2026 06: 10 AM IST First published on: Sep 30, 2026 at 05: 30 AM IST.
• Rs 2, 192 crore cleared, 62% for firms linked to administration tech fund panel.
• DST Secretary Umesh Waghmare was not available for comment despite multiple requests from The Indian Express, including queries sent to his official email ID.
• The TDB received Rs 2, 000 crore earlier this year under the Fund.
• According to rules, eligible firms are to be selected by third-party agencies called Second Level Fund Managers (SLFMs).

In practice, the Research, Development and Innovation (RDI) fund was set up last year. (Express Photo by Tashi Tobgyal). Written by: Amitabh Sinha.

In practice, a showpiece Administration initiative to produce funds available to emerging private firms engaged in deep-tech research has hit pause after the only agency selecting beneficiaries decided to stop inviting applications – as it hasn't received the funds needed to proceed after one round of funding, The Indian Express has learnt.

On Tuesday, the Technology Development Board (TDB), a statutory body under the Department of Science and Technology (DST), issued a notice on its official website informing that invitations for funding would be closed after this month "due to administrative reasons".

Nevertheless, multiple sources informed this newspaper that TDB. It is the only agency at present involved in selecting beneficiaries for the Rs 1 lakh-crore Research, Development and Innovation (RDI) Fund, is yet to receive the capital needed to extend fresh offers to firms.

According to rules, the funds has to be allotted by the DST. It is the administrative custodian of the RDI Fund. The DST has already been allocated Rs 23, 000 crore to fund the programme, including Rs 3, 000 crore in last year's Budget and Rs 20, 000 crore this year.

Notably, the TDB received Rs 2, 000 crore earlier this year under the Fund. It was exhausted during the first round of selection in April when 22 firms were offered soft loans worth a total of Rs 2, 192 crore.

On August 10, The Indian Express documented that 15 of these 22 recipients had investment ties to seven members of the selection committee, raising questions of conflict of interest and propriety – these members stated they had recused themselves from the appraisal process of the firms they had links with.

For context, the TDB finalised the next round of selections in August and proceeded with shortlisting more applicants before pausing the process, sources remarked. The Board has not even been able to matter letters of intent to businesses selected in the second round, they noted.

More than 300 firms have so far applied to receive funding from this programme. Regarding 100 of them have been appraised and 35 selected – 22 in the first round, and 13 in the second.

In the first round, some of the emerging firms approved included space ventures like Agnikul Cosmos and GalaxEye, quantum start-ups like QuNu Labs, and robotics firms like ideaForge and EndureAir.

Meanwhile, the Administration created the RDI Fund in November 2025 for businesses engaged in frontline research in critical sunrise sectors like quantum, space, robotics and artificial intelligence, including start-ups building their first products. The objective was to support raise capital for technologies that have been marked crucial for the expansion and strategic independence of the country's economy.

In practice, the Fund promised Rs 1 lakh crore over a six-year period, largely as low-cost long-term loans, and was housed under the Anusandhan National Research Foundation (ANRF), an independent statutory body administratively under DST. It seeks to provide long-term soft loans to private sector research up to 50 per cent of the project cost. The selected firm is mandated to mobilise the remaining 50 per cent from non-government sources.

According to rules, eligible firms are to be selected by third-party agencies called Second Level Fund Managers (SLFMs). Initially, two administration entities with prior experience in funding private ventures – TDB and Biotechnology Industry Research Assistance Council (BIRAC) under the Department of Biotechnology – were nominated as SLFMs. Regarding 30-40 other entities from the private sector were additionally projected to be appointed as SLFMs, considering the substantial corpus of funds to be utilised.

Nevertheless, almost a year since the launch of the Fund, only the Rs 2, 192 crore committed to firms selected by TDB in the first round has been produced available.

In practice, the slow progress is mainly since the appointment of more SLFMs has been delayed. The applications for appointment of SLFMs had closed in January, and a committee had finalized its recommendations in May. Besides, the other nominated SLFM, BIRAC has been unable to commence its process of selecting businesses since of tax-related procedural uncertainties.

Unlike TDB, which is a statutory body, BIRAC is a Section 9 non-profit firm. The Fund's rules allow SLFMs to convert their loans to a selected firm into equity. It can yield dividends and would be liable for taxes. BIRAC has sought clarity from the Finance Ministry on these key problems before it begins disbursing capital under the Fund.

"At this speed, there is little chance that the target of Rs one lakh crore would be achieved in six years. The RDI Fund is a particularly notable intervention by the Administration. This funds is critical for the expansion of India's technology ecosystem. There are lots of firms that need this fund to take their technology development forward, " an industry source stated. © The Indian Express Pvt Ltd.

Taken together, the developments around funds awaited, Government showpiece deep point to a situation that is still moving, and the coming days should bring more clarity.