Perspective: R&D Push for Private Sector | 03 July, 2025

0:14 Namaskar viewers. Hello and welcome to Senset TV. I am Tina. You're watching Perspective. In a transformative step to bolster India's research and innovation ecosystem, the union cabinet chaired by Prime Minister Narendra Modi has approved the research development and innovation the RDI scheme with a corpus of 1 lakh cr rupees. Now this scheme aims to provide long-term financing or refinancing with long teners at low or nil interest rates to spur private sector investment in research, development and innovation. Some of the key objectives of the scheme include encouraging the private sector to scale up research, development and innovation in sunrise domains and in other sectors relevant for economic security, strategic purpose and self-reliance.

1:00 Financing transformative projects at higher levels of technology readiness levels. supporting acquisition of technologies which are critical or of high strategic importance and facilitating setting up of a deep tech fund of funds. So on the show today we're going to talk about the funding mechanism of the RDI scheme, how it addresses the critical need of the private sector for a long-term affordable financing, fostering self-reliance and global competitiveness. So to discuss these aspects and more, I'm pleased to welcome two distinguished guests on the program, let me begin by introducing Padma Bhushan, Dr. Ajay Chri, co-founder at Ccl. He's the chairman of the mission

1:46 governing board of the National Quantum Mission of India and currently a distinguished fellow at the NITIO. Dr. Chri, absolute pleasure to welcome you on the program on Sunset TV. Thank you very much for your time. We are also pleased to welcome Professor Ashoto Sharma, former Secretary, Department of Science and Technology, Government of India. Professor Sharma, it's been a long time, but so glad you could spare some time to join us on the program. Welcome to Sunset TV. Let me in fact begin with your thoughts uh on this uh landmark initiative, the scheme that's been approved by the Union Cabinet. Do you believe it's it's a game-changing move uh that that could spur a lot of growth and development in India's innovation ecosystem? Oh, absolutely. There is zero doubt

2:31 about it. The need for such a instrument was felt for a long time. Uh so you know that the department of science and technology, ministry of science and technology uh has been supporting lot of R&D in the country. uh but basically it was driven by uh the invention and discovery ecosystem which basically means R&D labs it means academic institutes and so on. So even when we had industry they were like partners. It was not led by industry. Now the difference in this fund is that for the first time this is very historical. This is so historical I can tell you that this would be really a new beginning uh for both our knowledge creation our knowledge consumption and for our economic impact of R&D. So what is it?

3:18 So basically now for the first time that R&D and innovation would be driven from the industry end. So industry could have academia as partner right instead of uh academia having industry as partner. So the difference basically is uh that there there is the seeding and scale up of R&D and innovation led by industry in strategic and sunrise sectors deep tax you know the kind of technology that we need for India and nobody else is going to develop it for us. Nobody else is going to give it to us. Uh so so this is what we need to do in critical sectors for critical technologies. uh develop it through industry based on the knowledge uh which is already there in our ecosystem. So you see our weakness has

4:06 never been uh in terms of knowledge. It has never been in terms of Sarasati. It has been in terms of converting Sarasati into Laxshmi. So the interface between knowledge and market has been rather weak. It has been rather poor. And so this is the instrument uh which was actually going to handle all of this and it is going to do that uh by by by providing a long-term affordable and risk financing. So it is clear that if you are looking at something new there's going to be risk and industry is looking at short-term perspective. uh of course they have to uh so so point is we need certain technology we need to be atar and to be able to do that some of the risk has to be taken over by the government and so this particular fund

4:51 is just going to do that so as you go as you develop technology more and more risk becomes less and less and at that point industry can actually totally pick it up uh and that's what happens in all the developed countries so I'm so glad that that this is happening now uh cabinet uh the decision under honor able prime minister long overdue in fact uh so so this is a new chapter a new chapter we'll discuss uh the funding mechanisms in greater detail in due course of the program but Dr. Chri coming in for your perspective on the RDI scheme which uh was long awaited. Uh you've seen the Indian tech landscape evolve over decades. So from an industry perspective, how significant do you think this move is in giving the private sector the push that it needed all this

5:39 while to lead in high-end innovation and particularly strategic research? Well, actually the challenge in the country till now is that we spend very little on R&D. Yes. And especially we spend hardly anything in the private sector. The majority of R&D is done in the in the government sector. The science and research institutions, education institutions. So this is not good enough. Today our as per GDP we are 64% of GDP is what we spend on R&D. major countries spend anywhere between two to 5%. Now unless we start to think more about R&D, we are not going to succeed because the world has changed. The world has become

6:25 uniolar. Everyone is on their own and as professor Sharma said, nobody will give us the technology. Everybody will preserve their technology and lot and lots and lots of sanctions are coming back. So for example the US has sanctions, Europe has sanctions, China has sanctions and if these sanctions keep coming then we need to be totally self-sufficient. that we have to now move from atmana to technology sovereignty that is the essential part and we need to own technologies which are required for the next 15 years for India's growth and for us to get to a vixit bar by 2047

7:11 so do you believe sir that it bridges the gap in a lot of ways this was long overdue but now that this has come through with a corpus of 1 lakh cr rupees it'll finally bridge that gap that was required between ambition and access to capital. Uh will it in in more ways than one ignite that innovative passion that we've been speaking about for years? But perhaps this could be the push. You see, I do not believe that the corporate sector is short of money. It's the aspiration. The aspiration to spend on R&D, wait a while, get returns is not been there. And that is really why everybody as professor Sharma said nobody's thinking what should we do for tomorrow. If we look at today's

7:58 requirement yes the board will say don't spend money on R&D go and get more profits but that's not the way for a vixit bar to succeed. We now need to make sure that the private sector definitely spends money on R&D and this will be a huge nudge from the government to tell the private sector go ahead we are willing to share the risk with you. It's not that only you have to sh do the risk we are going to share the risk. Now this is a breakthrough strategy by the government and uh I think pretty much if a corporate wants to spend 10 crores 5 crores the government will give now that that reduces the risk risk by 50%. Right? Similarly for startups if they are going to put 5 crores the government will pay 70%. So you know this is the

8:46 kind of nudge that the government is doing now which was essential in a manner we are telling the private sector wake up we now need to get get better at doing R&D we need to create technology in India we need to have IP created in India for tomorrow and today we cannot be continue to dependent on others what's happened in China recently look at yesterday news they are making sure that the Chinese all go back and this don't stay in to factories. Number one. Number two, what's happened to the critical minerals issue? Every automobile company in India is today short of magnets. The third thing is that they've stopped export of uh fertilizers. Now, these are all things that they are going to constantly do to

9:31 us to trouble us. So it's better that we start to create our own and therefore this fund will enable us to start thinking that okay we have no choice but to do it and I think this big nudge that the government is giving is one of the best things that the government could have done and I think honorable prime minister has to be really really congratulated for this so because of this phenomenal uh decision to actually push the uh push R&D into private sector absolutely I think it's important important that at a time when the world is volatile and countries are becoming more and more pro protective about their technologies as both of you rightly suggested it's important for India to become self-reliant in critical areas and therefore there are various aspects

10:18 uh in this scheme there are various funding mechanisms that we will talk about now in greater detail professor Sharma an important aspect of this scheme is to offer long-term low or zero interest loans to the private sector now how will this unlock innov innovation particularly in sunrise sector as you mentioned but like deep tech AI semiconductors clean energy so how is how is it going to unlock the potential uh if you could explain that for us our viewers in fact what JG said is so relevant and I will also uh say a little bit more about how this is going to unlock our potential you see one of the aspects of industry-led R&D uh is that it gives relevance and direction and

11:03 early direction which academia by itself lacks. So while academia is more into creating knowledge, it's not always creating knowledge which would be utilized or which would have direction and relevance. So, so industry-led uh R&D would bring that direction and relevance. And even more important, let me point out that in India, uh you know, in order to invest more in R&D, you need more number of scientists who are engaged in R&D. Now, in India, there are 250 researchers per million people. In US, it is 4,200 scientists per million. in any of the so-called developed countries, it is 4,000 to 5,000 scientists per million of population. So

11:49 you see it is not if if I want to put in more R&D money with relevance and direction, I also need to have more number of scientists who are engaged in R&D. Now these new scientists will not only come from public sector, they not only come from the government. So now this is going to create actually a pool of scientists in R&D in private sector. Uh and that is so vital that is so critical because we don't have enough people in order to be able to do atar R&D in India in all the critical sectors. So, so a very big impact of this scheme, this instrument is going to be create a new pool of scientists who are working in industrial R&D, which means they understand actually the market realities. They understand what

12:36 is actually needed and how you're going to get there. So, you cannot now wake up and say look, I want a new technology overnight which would be globally competitive. This would be totally unrealistic. So therefore this industry alone cannot do it because they would be focused on year onear profit uh and their their uh you know shareholders and everything else. So it is only fair that government actually gives the initial push it provides the risk capital uh so that as was pointed out by AJ uh that you know industry actually would get into it. Actually there are two ways that that government can sweeten the deal uh in developing technology. One of them is risk capital which is long-term which is basically mitigates the risk and it looks at the critical

13:22 technologies which are needed for India and what does that mean? It means there's also a market for them. So whenever a government is a first buyer of critical technologies of sunrise sectors all our needs deep technology that that government actually support developing such technologies and they also the buyers so basically in place of you know depending on imports that depending on imports by the way for example 80% of biomedical devices are imported even today uh so it's not because we lack knowledge uh in fact I I know so many researchers in the country who can overnight make these devices point is that somebody has to take them to market. So it basically means that this R&D has to be driven by industry and so so so I think it's fairly clear

14:08 that this is a gamecher as you pointed out uh that this is indeed would be transformational beyond our imagination. I can guarantee you that I have had long experience with this uh and that we have been always been thinking about something like this. Absolutely. Let's hope this scheme does things differently and the outcome is different this time. But Dr. Chri, taking on from the initial point that professor Sharma made about not just the capital but also the scientific leadership that we will require. Uh so can we say that in in a way RDI scheme has laid the financial groundwork but we will now need a plan to mobilize human capital both domestically and globally and if yes what kind of a plan will be required in the times to come to perhaps

14:54 complement this financial groundwork that's been laid by RDI. You see he's made a brilliant point about people and the people are the researchers are the ones that will make this happen. Now private sector has not invested in hiring these researchers till now because they just didn't want to take a risk. They want to go and get a product from China, put a logo on it and sell it by tomorrow. Mhm. And make five and 10%. That's not where this country should be. This country deserves much better. We have the best skills in the world in terms of technology and knowledge and the number of STEM people that come out of this country are phenomenal. So all we need to do is take those people and convert them to be better scientists and engineers so that

15:40 we can genuinely go forward. Now look at the whole situation today. How does how did America happen? America happened because organizations like DARPA they gave challenges to private sector and startups and said go make these products if you make these products and we accept them we'll give you loads of business to be successful now the point that professor Sharma made was absolutely right the government business has to go to these people if they do this product that's the challenge we need to give to the private sector and then they will respond see today they think if I make the product who will buy but if the government says okay you go and make these 20 products and I will buy these 20 products in large numbers then the job gets done it's a virtuous cycle that's how America got created now what

16:25 did we do during COVID period we actually took a decision to buy local vaccine the company produced that vaccine and government accumulated the whole orders of all the states gave it to this company and that company became successful and we also created a local product right and I do believe that local product was better than than the global product. Of course, who played its own games in not allowing it, you know, that's a different issue. That's a different but the point that we have to be clearly about is that the HR part, the people part we can handle another way. Today if government needs to get diaspora to come back, America is today throwing out all its researchers. Trump has taken this decision to cut all uh research uh money. Those people are

17:13 available now. They are not going to be able to be easily absorbed within government because government has a different salary structure. Right? But moment you create this model which this scheme will provide then in this model all these people can come back to India and work together with us. So we are not going to no longer start from scratch. We will start if if it's if it's a 10th 10 uh 0 to 10 situation we'll start at 50. So that is the benefit that we will have of getting those people back and they will come at private sector salaries. So they will not have this issue why should I go back to India and lose my whole uh compensation that I get in America. So all these issues will get sorted out and one of the models that the government has thought through and I

17:59 remember in some of the discussions that we had with DST they were talking about a very interesting concept which professor Sharma does know is that they talked about a focused research organization model. Now this focused research organization he referred to it is the is a concept where industry and research research organization come together for a specific technology and the funding is provided to them as a FRO and this FRO when it gets this technology has the capability to pay whatever salary is required to make this happen right and therefore they can hire from abroad they can hire from within India and they can do what they like. So you know so this is opening a completely new way of creating uh technology and as

18:47 I kept as I keep saying to everybody the big techs come to India they sell all their products to us Indians but we don't sell anything to anybody else why is that so that's another issue Google come to India they sell a whole bunch to us we are at least buying from them look at Microsoft all our all our email system in in the government runs on all uh global products. Why does China do that? China doesn't allow a single global company to operate in that country. You know this is the opportunity. India's opportunity is its size. The size of its business available here from the government. It's its strength. So if this funding goes to private sector and startups and goes to focused research organizations, they

19:34 will also have the benefit of getting government money and government business. that will become a virtual cycle and nobody will then say why should I invest or not certainly and that's a valid point because innovation doesn't emerge just from the capital alone there are various factors which will drive it through to achieve the desired results uh what is the kind of uh uh larger vision that may be required in the times to come that is something that I ask you professor Sharma in the next round but for now there's a point that Dr. Dr. Chri made about the private sector not wanting to take risks. Can we say that there is a mechanism now under RDI scheme which supports risky but breakthrough innovations which we require and which can help India become

20:20 a global innovation hub. Something that all this while we've been wanting to become but there are factors which have restrained us. So maybe this is just the beginning and there could be multiple such schemes, multiple such initiatives which which could help us realize that vision. Oh absolutely and one word answer to all your questions is absolutely there absolutely no doubt about it. And so are there multiple models? In fact uh the such a model was seeded as a kind of pilot. uh in fact one of the missions technology missions called quantum technologies it is being headed by uh Dr. Chadri uh and before that uh in DST we had uh seated in certain technology

21:06 missions which had this DNA. What do I mean by that? It basically means that you see there's a mission in AI and cyber physical systems worth 4,000 K. Now this quantum mission which is also a very huge huge mission. What we want in these missions a that they they are arms length from the government. Uh second aspect is they have the freedom and flexibility uh to be able to work both with the government institutions and industry as equal partners. Uh and at the same time they can indeed they they section 8 company for example which is a not for-p profofit company. So they are bound not by the rules of the government but they are bound by the rules of a company. So other words you can actually invite people from abroad and you can pay the market fair market rates uh to

21:54 people who are competent. So all of that actually those missions have been very successful because they integrate they integrate all the way from basic R&D to startups to market to industry partnership and the flexibility that is required. So I have no doubt that the future uh of all these technology missions uh basically is a integration b uh b um end to end value chain uh which basically means going all the way from basic R&D to market and in between you have areas like industry you have startups you have government policies don't forget all of these things happen and in fact AJ referred to it he said look it's not because we don't have science but because we may not have the right policies and structure and

22:40 processes for it. I'll give you a very quick example. In fact, he had referred to some company. By the way, all the maps that we have been using until few years ago or even today, they are not made in they are not they are not monetized by an Indian company, right? So without taking the name the the maps that I use which are used for service which is used for infrastructure which is used for now you know Swamit scheme of honorable prime minister all of this was not possible not because we didn't have the signs is not because we didn't have the drones and LAR but because we had a policy a 100-year-old policy from the time of British which said that nobody can do surveying and mapping without very tedious approvals uh from the government which government itself takes 8 months. Okay, something like survey of India themselves uh they will

23:26 take 8 months to get approval to do survey right so it didn't make any sense by the way that policy was changed under under the very professor now we are now we are in a vision 2047 that's our goal uh we want to uh perhaps uh undo the wrongs that have been done and that there is there is a framework that that we've set for ourselves but as as someone who's headed such an important uh u ministry. I I the question here is uh beyond funding in your experience what is the immediate or what are the priority areas for us for us to become a global innovation hub in strategic technology understood I understood it's not only about funding funding is necessary but

24:11 not sufficient so what is it that we need in terms of sufficiency for our science to work yes what we're asking is what makes science and technology work or not right so no matter how much money you would throw in there it would not bring fruit. Unless you have unless you have ease of doing business, you have flexibility, you have freedom, you have integration of all the stakeholders of science and technology working together and you have the rules, regulations and policy. So in fact we need to deregulate, we need to liberalize and we wherever government is a first buyer, let me introduce a very revolutionary concept here in one sentence. when when government is the buyer they should not look at L1 for a company they should

24:56 look for L1 for the nation okay so as the concept of the lowest cost for the nation it would become clear that you have to buy you have to develop and buy indigenous products okay how many jobs you going to create here how how much of that money circulates here as opposed to what is going out and this is very clearly pointed out by AJ I had in fact introduced this concept I will always be a champion of this concept. I don't know if it's going to take 10 years for this to come into being. But then you know it is clear that when government is buying taxpayers money is being used then it is a benefit to taxpayer which is what counts. It is not benefit to some third country uh which counts right. So Elban is a is a wrong concept. Okay. And and so I think that all of this stuff needs

25:43 to be done. And finally let me just say what we need is a cultural and behavioral transformation. Okay. In the absence of which no amount of uh you know scientist or the money is going to work. In fact I give one full hour lecture on what makes science and technology work and cultural and behavioral aspect. The confidence that we have in ourselves as a nation in our scientists and our science is what is going to do it. I think that's the most important part in any kind of transformation that we are visualizing today. But uh what an interesting conversation this is turning out to be. I wish time allowed us to keep continuing but Dr. Dr. Chri, I'll have to wind up the program with one last comment from you respond to professor Sharma and at the same time uh uh how how do you see us or what do you think

26:31 should be a vision that we must adopt uh right now to perhaps connect the three things that there is no dirt of in India? Ambition, talent, infrastructure is something that we are coping up with but we need a solid vision perhaps which can connect the three in order to uh you know have the desired outcome about which we are talking about today and which will lead us to our vision 2047. So fundamentally what I feel is that we should identify 12 or 14 areas within the RDI scheme and these 12 and 14 areas are what we believe the technologies we must own and we must spend time next 5 to 10 years to really do end to end

27:18 everything in that technology and create companies in India which will be top five in the world 10 to 15 years from And every product that we create, every technology we create should have at least a 200 to300 billion market globally. Otherwise, there's no sense in creating products. We must convert our country from being a servicesled country to a productled country. Too many years we have spent doing services. You look at what is happening to IT services today. They're all having facing headwinds due to AI and automation. Yes, we now need to change our thinking. We need to make products. So the good news is that the new missions of the government are totally product oriented. For example, in quantum mission, we have exact description of what products the

28:05 scientists must make in the next 7 to 10 years. If you look at this news this scheme RDI scheme, the thought is beautiful. ANRF will do TRL1 to TRL 4. This fund will take it from TRL5 to TRL 9 and do total translation research. And where we don't have technology, we should go and buy it because RDI provides for it. For example, there are so many countries that are growing. Look at Korea, look at Taiwan, look at Japan. All those countries are green. A lot of their technology companies don't have successors. We can go and buy those companies. So we know we need to think big. We have to say okay, we will have a Qualcomm from India in next 10 years. we

28:50 will have a AT&T from India in 5 years. You know this is the kind of thinking we have to have. We keep thinking too small. We need to think big and this it all it needs is aspiration. And I've always maintained that A is greater than R. Aspiration is greater than resources. If you have the aspiration, resources happen. And the country is now being provided all the resources by the government. And the good news is ease of doing R&D has also been done recently as a major in uh strategy from DST which was totally led by DST approved by the government. So when I was doing my mission in quantum people were saying I I take too long to buy my tech buy equipment all those things have been changed recently. So you know the

29:38 environment is changing the ecosystem is changing. This is the time to be a country which dreams big and the country that thinks that we should own technologies for technology sovereignty. Operation Synindhur has taught us this. During operational Synindur we used all Indian technologies. We did not use GPS. We did not use foreign satellites. We used our own satellites. We used Navic. You know all these things are required. The drones that were used were domestic drones. But I want to point out a lot of components of those drones were not Indian. Now we need to say okay if drone is one of the technology we should choose we should make everything that a drone needs. So that is the vision that I want to say I feel that the industry

30:23 must have the country must have. Absolutely. It's uh when you say aspiration is greater than resources, it's uh uh once again time to underline that when the aspirations of 140 crore or Indians combine, imagine the momentum that it's going to create and the transformation that it is going to bring about. So something that we have envisioned for 2047 is something that we can achieve well in time and something uh that we want uh to happen will happen perhaps maybe well before time. But I promise you that we'll continue with this conversation further because there's so much to talk about in the area of innovation, research and development and how India is progressing. But there's so much that can still happen provided that aspiration uh is given the right direction. So once again I would like to

31:09 thank both my guests professor Sharma and Dr. Chri for joining us uh for uh that engaging conversation today. Perhaps we'll have we'll have we'll find time to uh take this further in another edition of perspective. Thank you once again for joining us on the program. To you viewers, thank you very much for your time as well. Time allows me to take up only that much on this edition of perspective.