New Delhi: The Indian government is contemplating the creation of a comprehensive scheme, allocating Rs 1 trillion to provide concessional capital support to the private sector. The aim is to incentivize the adoption of indigenous deep-tech and cutting-edge technologies in crucial sectors such as defense, energy, and electronics.
This scheme, projected to operate over an initial period of five years, could be administered by state-run entities like the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF), according to a senior official as reported by FE.
Discussions are underway among various government departments and scientific institutions to finalize the scheme. The objective is clear: to promote Indian technology in emerging sectors and reduce dependence on imported technology.
Read More: India Diversifies Defense Procurement Amid Geopolitical Tensions: Shift Away from Russian Arms
While Indian research institutions continuously develop various technologies through their research and development (R&D) efforts, there exists a tendency for Indian firms to favor tested foreign technology over untested local alternatives. By providing concessional financing, companies can explore and adopt indigenous technology for their product development with reduced risk, leveraging long-term loans at low or zero interest rates along with moratorium options.
“The government aims to foster the adoption of indigenous technology by the private sector in cutting-edge domains such as energy and electronics,” the official emphasized.
Recognizing the pivotal role of research and innovation in driving growth, employment, and development, the Indian government envisions sustaining high economic growth to achieve developed nation status by 2047.
In her Budget speech for 2024-25, Finance Minister Nirmala Sitharaman unveiled plans to establish a corpus of Rs 1 lakh crore with a fifty-year interest-free loan. This corpus aims to provide long-term financing or refinancing with extended tenors and minimal interest rates, incentivizing significant research and innovation scaling up in sunrise sectors.
The proposed capital expenditure fund, managed by the Department of Economic Affairs, will allocate annual funding to the private sector based on their project requirements.
India’s focus on deep-tech sectors like artificial intelligence (AI), machine learning, robotics, biotechnology, and advanced materials is intensifying. Deep tech, rooted in scientific discoveries and engineering innovations, necessitates substantial R&D investments and holds the potential for transformative impact across industries.
Despite India’s prowess in IT, product, and software development, backed by a skilled workforce and robust research ecosystem, challenges persist. India’s expenditure on R&D remains relatively low compared to other major economies, highlighting the need for increased investment, infrastructure enhancement, and regulatory reforms to fully harness the nation’s deep-tech potential.
