RDI Fund Row: Deeptech Investors Seek More Transparency, Independent Oversight

The government's ₹1 Lakh Cr Research, Development and Innovation (RDI) fund, aimed at revolutionizing India's deeptech sector, has sparked controversy over alleged connections between fund beneficiaries and members of its investment committee. Fifteen out of the 22 companies that received ₹2,192 crore in the first round had investment links with seven of the 12 IC members.

The IC members claimed their interests were disclosed and they recused themselves where necessary, but the government maintains no conflict was violated. Investors, fund managers, and ecosystem players have expressed concerns that the fund's current structure could benefit only a few well-established ventures, limiting opportunities for new players.

The fund operates in two tiers: the main corpus held by a special purpose fund under ANRF and implementation through fund managers like TDB, AIFs, DFIs, NBFCs, and research organizations. Startups must meet certain criteria to receive funding, including being registered in India and engaged in RDI-intensive technologies at TRL 4 or above.

The selection process faced criticism due to the lack of transparency, with many startups missing the timeline to apply. The government asserts that selection was merit-based, and conflicted members had no role in the evaluation or sanctioning of proposals. However, the controversy has raised questions about the fairness of the RDI fund and its potential to unintentionally favor established investors and companies.