India Backs 5 Deep Tech Startups with $1.2B RDI Fund

India's government just handed out its first funding from a massive $12 billion innovation program, and the five companies that made the cut are tackling some of the world's toughest tech challenges.

On May 13, the Technology Development Board signed agreements with five startups under the Research, Development and Innovation Scheme. The program launched last November with a bold mission: channel public money into private companies building breakthrough technology that traditional investors often consider too risky.

In a live ceremony in New Delhi, Bengaluru-based IISTEM Research received the first payment of $6 million. The company is developing cell therapies for two diseases doctors currently cannot cure: a form of blindness called geographic atrophy and a lung condition called idiopathic pulmonary fibrosis.

The other four companies span equally ambitious territory. Dhruva Space in Hyderabad secured $12.6 million to build satellites for communications and national security. Endure Air Systems in Noida is creating heavy-duty unmanned helicopters for disaster response and remote logistics. ETRNL Energy is manufacturing advanced battery cells for electric vehicles using patented 3D technology. Noccarc Robotics in Pune is building portable ICU units that work in rugged Indian conditions.

Here's what makes this program different from typical government grants: companies have to pay the money back. The fund operates with low-interest loans of 3% to 4% over 12 to 15 years, or takes up to 25% equity in exchange for investment. When companies repay or succeed, that money flows back into the fund to support the next generation of innovators.

Since the first call for proposals opened in February, the board received 124 applications requesting over $1.2 billion in total support. The Technology Development Board has already approved 22 projects, with more agreements coming in the next few weeks.

The Ripple Effect

Principal Scientific Adviser Ajay Kumar Sood believes the $12 billion commitment will attract five to ten times more investment from private companies. When government backs risky early-stage technology, it gives private investors the confidence to join in.

India has long struggled with what's called the "valley of death" where promising lab research dies because it cannot find funding to become a market-ready product. This program targets exactly that gap: companies that have working prototypes but need capital to scale manufacturing and reach customers.

The fund is designed to keep working for up to 50 years. Unlike traditional grants where money disappears into research, this revolving structure means every repayment creates opportunity for another breakthrough.

Five companies just proved that India is ready to bet big on homegrown innovation that solves real problems.