Union Budget 2025 | Government to frame policy, implementation guidelines for R&D, Deeptech funds

New Delhi: With the announcement of Rs 20,000 crore for research and development (R&D), and a new Deep Tech Fund of Funds in the Union Budget 2025, the Centre is now starting the work of the policy framework, implementation guidelines, and use cases of these announcements.

Central government officials will interact with multiple stakeholders over the next few months, including fund managers in Mumbai, and start-up founders, tech executives, scientists, developers and VCs in Bengaluru, among other cities, before coming up with the policy framework for R&D and DeepTech.

“The road to come up with implementation guidelines for these two funds will go through Bengaluru,” a highly placed source told DH.

In the Union Budget, Finance Minister Nirmala Sitharaman had said that to implement the private sector driven Research, Development and Innovation initiative announced in the July Budget, she is allocating Rs 20,000 crore for 2025-26. 

She also said that “A Deep Tech Fund of Funds will also be explored to catalyse the next generation startups as a part of this initiative.” the quantum of this fund will be decided based upon discussions with the stakeholders mentioned above.

The first challenge for officials will be to rope in fund managers who have experience investing in R&D.

“Funds are usually deployed in markets or in products with guaranteed returns. In the case of R&D, we are talking about innovations and technologies with a bet on their future usage, but the return on investment is not necessarily guaranteed,” the official said.

The centre is keen on Bengaluru as it is considered to be the hub of talent when it comes to emerging technologies like Artificial Intelligence (AI) applications, generative AI, machine learning, robotics, deeptech and others.

Such discussions are expected to begin April onwards, and the names of stakeholders that the government officials would like to meet, is being finalised.

Officials are acutely aware that to match up to China and the United States, many innovations will have to be developed locally, especially in AI.

Global and Indian tech ecosystems are now aware how far they have been left behind, especially with the revelation of DeepSeek, which is an AI research lab based in Hangzhou, China. Its AI model DeepSeek-R1, which was released in early January, has topped the iPhone download chart in the United States, leaving behind the industry giant OpenAI’s ChatGPT.

It is an open-source model. This means the developer community can inspect and improve the software. It was developed at a fraction of the cost of ChatGPT.

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