Research Development and Innovation Scheme

As a new MSME owner, you often face challenges in securing affordable financing for research and innovation. The Research Development and Innovation Scheme is designed to address this gap, encouraging private sector investment in high-impact R&D projects. This scheme for research and development targets sectors crucial for India’s economic security and technological leadership, offering you a unique opportunity to scale up innovation, adopt cutting-edge technologies, and enhance your competitiveness in both domestic and global markets.

What is the Research Development and Innovation Scheme?

The Research Development and Innovation Scheme was approved by the Union Cabinet on July 1, 2025, with a financial outlay of ₹1 lakh crore. This scheme is specifically designed for private sector entities, including MSMEs, to promote investment in research, development, and innovation by offering long-term concessional loans and risk capital. The scheme is administered by the Anusandhan National Research Foundation (ANRF), under the strategic guidance of the Prime Minister.

Objectives of the Scheme for R&D

• Encourage private sector investment in R&D and innovation, especially in sunrise and strategic sectors relevant for economic security and self-reliance.
• Finance transformative projects at higher Technology Readiness Levels (TRLs).
• Support the acquisition of critical and strategically important technologies.
• Facilitate the creation of a Deep-Tech Fund of Funds to boost deep-tech startups and innovation.

Key Features of the Research Development and Innovation Scheme

• Offers long-term financing or refinancing with extended maturity periods.
• Loans are provided at low or nil interest rates to reduce your financial burden.
• Funding is available for basic and applied research projects.
• Focuses on sunrise sectors such as biotechnology, robotics, AI, clean energy, and climate tech.
• Supports technology acquisition and commercialisation.
• Establishes a two-tier funding structure: a Special Purpose Fund (SPF) within ANRF and second-level fund managers for disbursal.
• Includes equity funding options, especially for startups.
• Deep-Tech Fund of Funds created for high-risk, high-reward ventures.

Financial Assistance Offered Under the Scheme for R&D

As an MSME owner, you can benefit from a robust and structured financial support system under the research development and innovation scheme. The government has designed a two-tiered funding mechanism to ensure that funds are distributed efficiently and reach innovative projects like yours.

Key Components of Financial Assistance

1.Special Purpose Fund (SPF) under ANRF

The government channels ₹1 lakh crore into the Anusandhan National Research Foundation through a 50-year, interest-free loan. This fund is managed as a Special Purpose Fund (SPF), which acts as the main custodian and distributor of the scheme’s resources.
2. Second-Level Fund Managers

The SPF allocates funds to various second-level fund managers. These managers are responsible for evaluating, selecting, and funding individual R&D projects. They provide financial support in two main forms:

• Long-term concessional loans: These loans are offered at low or nil interest rates, making it easier for you to invest in research and innovation without worrying about heavy financial burdens.
• Equity financing: Especially beneficial if you are a startup, this allows you to receive direct investment into your business, helping you scale up your innovative solutions.

3. Deep-Tech Fund of Funds

A portion of the SPF is also contributed to a Deep-Tech Fund of Funds. Through this, your MSME or startup can access indirect financing via venture capital and other investment channels, particularly if you are working in high-risk, high-reward deep-tech sectors.

How does the Funding Flows?

Types of Financial Support You Can Avail

• Long-term concessional loans
  Primary mode of support, ideal for R&D and innovation projects, with flexible repayment and minimal interest.
• Equity financing
  Especially for startups, allowing you to raise capital without immediate repayment obligations.
• Refinancing options
  If you already have R&D loans, you may be able to refinance them under better terms through this scheme.
• Deep-Tech Fund of Funds contributions
  Access to venture capital and investment for high-potential, high-tech projects.

This structured approach ensures that you, as an MSME or startup, have multiple avenues to secure funding for your research and development ambitions, making the scheme for R&D a comprehensive solution for your innovation journey.

Eligibility Criteria for the Research Development and Innovation Scheme

Eligibility

You are eligible if:

• You are a private sector entity, including MSMEs and startups.
• Your business is engaged in R&D, innovation, or technology development.
• Your project falls within the sunrise or strategic sectors identified by the scheme.
• You have a viable project proposal with clear objectives and outcomes.
• You agree to comply with the scheme’s guidelines and reporting requirements.

Non-eligibility

You are not eligible if:

• You are a purely academic or research institution (the scheme is private sector-focused).
• Your project does not involve R&D, innovation, or technology development.
• You are seeking funding for routine business operations or non-innovative activities.
• Your sector is not covered under the scheme’s notified list of sunrise or strategic sectors.

Documents Required for the Research Development and Innovation Scheme

• Business registration certificate (MSME/Company/Startup)
• Detailed project proposal (including R&D objectives, expected outcomes, and budget)
• Financial statements and projections
• PAN and GST registration
• KYC documents of promoters/directors
• Proof of sectoral eligibility (if required)
• Any additional documents as specified in the scheme guidelines

How to Apply for the Research Development and Innovation Scheme

Step 1: Visit the official portal of the Anusandhan National Research Foundation (ANRF) or the Department of Science and Technology (DST).

Step 2: Register your business and create a user profile.

Step 3: Prepare and upload your detailed R&D project proposal along with all required documents.

Step 4: Submit the application and await preliminary screening.

Step 5: If shortlisted, participate in evaluation and due diligence rounds.

Step 6: Upon approval, sign the funding agreement and receive disbursement as per the agreed terms.

Benefits of the Scheme for Research and Development

• Affordable Financing
  You get access to long-term, low or nil interest loans, reducing your cost of capital and enabling you to invest more in innovation.
• Risk Mitigation
  The scheme provides growth and risk capital, allowing you to undertake ambitious R&D projects with less financial risk.
• Sectoral Focus
  By targeting sunrise and strategic sectors, you can leverage government support in high-growth, high-impact areas.
• Equity and Fund of Funds Support
  Startups and MSMEs can benefit from equity investments and indirect funding through venture capital channels.
• Global Competitiveness
  Enhanced R&D capacity helps you compete on a global stage, opening up new markets and opportunities.

Real-World Examples of the Research Development and Innovation Scheme

• MSME-led AI solutions for healthcare
• Robotics startups developing automation for manufacturing
• Clean energy MSMEs innovating in solar or battery technology
• Biotechnology firms working on next-generation vaccines

Related Government Support Plans with the Research Development and Innovation Scheme

Final Words

The Research Development and Innovation Scheme is a game-changer for MSMEs like yours, offering the financial muscle and strategic support needed to transform your innovative ideas into market-ready solutions. By leveraging this scheme for R&D, you can overcome funding barriers, accelerate technology adoption, and position your business at the forefront of India’s innovation journey.