Deep-Tech Funding Push Hits Pause As ₹1 Lakh Cr RDI Corpus Runs Short

The government’s ₹1 lakh crore Research, Development and Innovation (RDI) Fund, aimed at supporting private companies working on deep-tech and other advanced technologies, has hit a pause after its first round of funding.

The Technology Development Board (TDB), a statutory body under the Department of Science and Technology (DST), has announced that it will stop accepting fresh applications for the fund after this month. The Board cited “administrative reasons” for the decision.

However, according to The Indian Express, the TDB has not received the funds required to make fresh offers to companies after the money available for its first round was exhausted. The report cited multiple sources familiar with the matter. The TDB has also not issued letters of intent to companies selected in the second round, even though the selection process has been completed.

First Round Uses Up Available Funds

The RDI Fund was launched in November 2025 with a proposed corpus of ₹1 lakh crore to be deployed over six years. It is intended to provide low-cost, long-term funding to private companies developing technologies in areas such as artificial intelligence (AI), quantum technology, space and robotics.

The fund is designed to support up to 50% of the cost of eligible projects through soft loans, with companies required to raise the remaining amount from non-government sources. The programme is housed under the Anusandhan National Research Foundation and is administered by the DST.

More than 300 companies have applied for funding so far, according to The Indian Express. Around 100 applications have been evaluated, with 35 companies selected across two rounds. The first round covered 22 companies, while another 13 were selected in the second round.

The TDB had received ₹2,000 crore earlier this year for the programme, which was exhausted after the first round. The 22 companies selected in that round were offered loans totalling ₹2,192 crore. These included space companies such as Agnikul Cosmos and GalaxEye, quantum technology startup QuNu Labs and robotics firms including ideaForge and EndureAir.

A July parliamentary reply by Union Science and Technology Minister Jitendra Singh had said ₹1,000 crore each had been sanctioned to TDB and Biotechnology Industry Research Assistance Council (BIRAC). Of this, ₹500 crore had been released to TDB in March 2026, according to PTI.

More Fund Managers Still Awaited

The funding delay is also linked to the slow expansion of the network of agencies that are supposed to manage the RDI Fund. Under the scheme, these Second-Level Fund Managers (SLFMs) are responsible for evaluating and financing eligible private-sector technology companies.

TDB and BIRAC were initially designated as SLFMs, while around 30-40 additional entities were expected to be brought into the framework. However, the process of appointing more fund managers has moved slowly. Applications for the role closed in January, while a committee finalised its recommendations in May, The Indian Express reported.

BIRAC has also not started selecting companies under the scheme. The organisation, which is a Section 8 company rather than a statutory body like TDB, has sought clarity from the Finance Ministry on tax-related issues arising from the fund’s rules.

The rules allow fund managers to convert loans given to companies into equity. BIRAC has sought clarity on the tax treatment of such equity holdings before beginning the disbursement process, according to the report.

The programme has also faced scrutiny over potential conflicts of interest in its first round. The Indian Express reported in August that 15 of the 22 companies selected had investment links to seven members of the TDB selection committee. The members had said they had recused themselves from evaluating companies with which they had links.

TDB officials have rejected allegations of wrongdoing. TDB Secretary Rajesh Kumar Pathak said, according to PTI, that the scheme’s guidelines recognise that conflicts of interest can arise because experts may have investments in companies directly or through funds. He said the framework requires disclosure of interests and recusal where necessary.

The latest pause means the government’s ambitious six-year plan to deploy ₹1 lakh crore into private-sector research and innovation is yet to gather pace. With only the funding committed in the first TDB round currently available, delays in releasing funds and appointing additional fund managers could affect the pace at which companies receive support.