The Research, Development and Innovation Fund has approved its first cohort of 19 fund managers, with ₹7,131 crore committed to firms developing technologies past the laboratory stage. The same day, the Technology Development Board signed an ₹86-crore deal through the fund for four AI-discovered drug candidates. The scheme is moving from announcement to deployment. Transparency about who gets the money, and on what terms, will decide whether it earns trust.
India has long had a research problem that money alone does not explain. Its laboratories produce papers and patents, but far fewer technologies reach the market. Indian industry has historically spent little on R&D compared with peers in China, South Korea or the United States. The Research, Development and Innovation (RDI) Scheme, a ₹1-lakh-crore programme launched in November 2025, was designed to change that by giving long-term, risk-tolerant capital to companies working on difficult technologies. On Monday, 12 October, the scheme showed its first large-scale results.
According to a Ministry of Science and Technology announcement reported by ANI, the Research, Development and Innovation Fund (RDIF) has approved its first cohort of 19 “second-level fund managers”, with a total commitment of ₹7,131 crore. The Empowered Group of Secretaries (EGoS) approved the cohort at a meeting on 8 October. It comprises 14 alternative investment funds (AIFs) and five focused research organisations (FROs).
How the money is meant to flow
The design is a fund of funds. The RDIF is managed by an independent business unit inside the Anusandhan National Research Foundation (ANRF), under the Department of Science and Technology. Rather than picking companies itself, the RDIF channels capital through intermediaries, the second-level fund managers, which invest in enterprises doing research, development and innovation at Technology Readiness Level (TRL) 4 or above.
TRLs are a nine-step scale first used by NASA. TRL 4 means a technology has been validated in the laboratory. TRL 6 means a prototype has been demonstrated in a relevant environment, and TRL 9 means a proven system in operation. The stretch from TRL 4 to TRL 7 is often called the “valley of death”. Academic grants have usually run out by then, while conventional venture capital and banks see the risk as too high and the payback as too slow. That is precisely the gap the RDI Scheme targets.
Each fund manager must raise private capital matching the RDIF’s contribution. If the ₹7,131 crore is the public share, the cohort could mobilise roughly twice that amount in total. Neither the announcement nor the reporting makes clear whether ₹7,131 crore is the RDIF’s commitment alone or the combined figure, so NSH treats the total as unconfirmed.
The inclusion of five focused research organisations is notable. FROs are a relatively new model, popular in the United States, in which a dedicated team pursues a defined technical goal over a fixed period, often building tools or platforms that neither a university nor a start-up would build alone. Their presence suggests the scheme will fund some mission-style work, not only venture-type equity.
The EGoS also approved five additional technology areas for coverage. Neither these nor the 19 fund managers have been named publicly. The selection process began with a call for applications in January 2026 and included objective assessments, interviews with an Expert Advisory Committee, and review by the ANRF Executive Council before the EGoS decision. The RDIF says it will keep inviting applications and onboarding further cohorts.
First money into AI-designed medicines
The same day, a release from PIB Hyderabad set out one of the first direct investments made through the RDI Fund. The Technology Development Board (TDB), under DST, agreed to provide ₹86 crore to Peptris Technologies, a Bengaluru company, through an optionally convertible debenture. The money is half the estimated ₹172-crore cost of a project called VIGOR. Its aim is to take four AI-discovered drug candidates from TRL-4 to TRL-6 within three years, through advanced preclinical studies, IND-enabling studies, formulation and early clinical work, with global contract research organisations supporting validation.
The four candidates are: – PEPR111: for nerve-related disorders and cancer; –PEPRX101: for hair-loss prevention; – PEPR202: for nerve weakness; – PEPR112: for Duchenne muscular dystrophy.
TDB Secretary Rajesh Kumar Pathak said that turning promising AI discoveries into standard treatments requires sustained investment, rigorous scientific evaluation and a clear development path, and that the RDI Fund is meant to bridge the gap between innovation and clinical development.
Some caution is needed. No efficacy or safety data have been published for these candidates. Worldwide, most drug candidates that enter clinical development never reach approval, and AI-discovered molecules have not yet shown that they escape that attrition. The deal is a bet on capability, not a validated result.
The governance question
Public venture-style funding works only if the public trusts how it is allocated. Inc42, reporting the announcement, recalled an August investigation by The Indian Express that alleged nearly two-thirds of more than ₹2,000 crore allocated to deep-tech firms had gone to companies linked to members of the selection panel. NSH has not independently examined those allegations. In Inc42’s own third-quarter survey of 85 institutional investors, 52 per cent called disclosure and recusal safeguards adequate but said visibility into the process was limited; 25 per cent saw a governance failure needing independent oversight.
That context makes Monday’s omissions significant. Naming the 19 fund managers, their individual commitments and the five new technology areas would let researchers, investors and taxpayers judge whether the money is reaching the intended frontier, and whether conflicts are being managed.
The bigger picture
India’s gross expenditure on R&D has hovered at well under 1 per cent of GDP for years, with business contributing a smaller share than in most leading research economies. If the RDI Fund draws matching private capital into hard technologies such as semiconductors, advanced materials, clean energy, biotechnology and quantum, it could change that. It could also help Indian laboratory inventions become products made in India. Deep-tech funding is rising from a low base; Inc42 counted US$290 million across 28 deals in the third quarter of 2026, up 176 per cent on a year earlier.
What to watch
The names of the fund managers, the first portfolio investments, how much private money is actually matched, and whether ANRF publishes the kind of disclosure that would answer the conflict-of-interest questions.
–Raja Aditya
Key facts
- Announcement: Ministry of Science and Technology, 12 Oct 2026 (ANI, 20:34 IST). The EGoS approved the cohort on 8 Oct.
- First cohort: 19 second-level fund managers (14 AIFs and 5 FROs); ₹7,131 crore total commitment. Names not disclosed.
- Scheme: RDI Scheme, ₹1 lakh crore, launched November 2025; fund housed in an independent business unit of ANRF, under DST.
- Eligibility: enterprises at TRL 4 and above; fund managers must match RDIF money with private capital.
- TDB–Peptris (PIB 2322300, 12 Oct, 10:52 IST): ₹86 crore (optionally convertible debenture) towards the ₹172-crore VIGOR project; four AI-discovered candidates from TRL-4 to TRL-6 in three years.
Deep-tech funding (Inc42): US$290 million across 28 deals in Q3 2026, up 176% year on year.
