(MENAFN- KNN India) In a major step to strengthen India's innovation ecosystem, the Union Cabinet has approved the Research Development and Innovation (RDI) scheme, aiming to significantly enhance private sector participation in research and development (R&D).

The initiative, named the Anusandhan National Research Foundation, proposes the creation of a Rs 1 lakh crore fund to provide low-interest, long-term loans to private firms for research in emerging and strategic sectors.

The government hopes this will bridge the current R&D gap and boost innovation-driven growth.

The scheme will operate through a two-tier model. The first tier will manage the special purpose fund, while the second tier, comprising fund managers, will distribute these funds to eligible private sector projects, with a special emphasis on sunrise industries and critical technologies.

India currently spends just 0.65 per cent of its GDP on R&D-far behind countries like the US (2.5 per cent), China (2.4 per cent), and South Korea and Israel (around 4-5 per cent).

Moreover, the private sector contributes only 35 per cent to India's R&D efforts, compared to 75 per cent in the US and China.

This shortfall has impacted the country's ability to create globally competitive brands, develop advanced technologies, and increase patent output.

The new scheme aims to change that by fostering collaboration between industry and academia, encouraging innovation among startups and MSMEs, and investing in basic scientific research.

To fully realise the benefits of the RDI scheme, experts stress the need for quality education, improved infrastructure, and strong policy support to create a skilled workforce and a sustainable R&D ecosystem.

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