India’s PLI, RDI Fund Transforms MedTech R&D

Overview: India’s Healthcare Innovation Agenda

India’s Economic Survey 2025–26 places research, innovation, and advanced manufacturing at the heart of the country’s healthcare transformation. Finance Minister Nirmala Sitharaman tabled the Survey in Parliament, outlining a multi-pronged strategy. It links three major initiatives — the Production Linked Incentive (PLI) scheme, the Research, Development and Innovation (RDI) Fund, and the Anusandhan National Research Foundation (ANRF) — to long-term health system strengthening. Together, these programs signal a decisive shift away from import dependency toward domestic innovation and self-reliance.

PLI Scheme: Building MedTech Manufacturing Capacity

Scale and Investment Milestones

The PLI scheme launched in 2020 and now covers 14 sectors. Its total outlay stands at ₹1.97 lakh crore. Since launch, it has attracted over ₹2 lakh crore in realized investments. Furthermore, it has generated incremental production and sales of more than ₹18.70 lakh crore as of September 2025.

Impact on Pharma and Medical Devices

The pharmaceutical and medical devices segments stand out as key beneficiaries. More than 20 approved projects are currently in production. These projects cover over 50–57 high-end devices, including MRI and CT scanners, mammography systems, linear accelerators, ultrasound equipment, heart valves, stents, and dialysis machines. The Department of Pharmaceuticals reports that the scheme has attracted over ₹1,000 crore in actual investments. This signals growing industry confidence in India as a credible MedTech manufacturing base.

RDI Fund: Financing Large-Scale Innovation

Structure and Funding Allocation

The Union Cabinet approved the RDI Scheme on July 1, 2025. PM Narendra Modi formally launched it on November 3, 2025, at ESTIC 2025. The scheme carries a total corpus of ₹1 lakh crore spread over six years. For FY26 alone, ₹20,000 crore is earmarked. Importantly, the fund offers long-term, low-interest or nil-interest financing. This approach targets private R&D rather than short-term grants.

Who Can Access the Fund

The RDI Fund operates through a two-tier system. At the first level, a Special Purpose Fund (SPF) manages the government-allocated corpus. At the second level, Alternate Investment Funds (AIFs), Non-Banking Financial Companies (NBFCs), Development Finance Institutions (DFIs), and Focused Research Organizations (FROs) channel funds into companies and startups. The Department of Science and Technology (DST) serves as the nodal agency for implementation.

Priority Areas in Healthcare

Healthcare and pharmaceuticals are among the top priority sectors. The scheme targets biologics, diagnostics, genomics, synthetic biology, and biomanufacturing. Additionally, it covers AI applications in health, high-end medical devices, and novel therapeutics. These focus areas directly address vulnerabilities exposed during the COVID-19 pandemic.

ANRF: Driving Research Collaboration

The ANRF, operationalized under the ANRF Act 2023, acts as the apex body for India’s research ecosystem. It provides strategic direction, expands competitive grant funding, and fosters collaboration among academia, industry, and government laboratories. Notably, ANRF has already initiated missions in EVs, 2D materials, MedTech, and AI for Science and Engineering. For the life sciences sector, this architecture supports a shift from generics-dominant models toward higher-value biologics, novel therapies, and MedTech design capabilities.

India’s Rising Global Innovation Rank

India’s Global Innovation Index rank has improved significantly — from 66th in 2019 to 38th in 2025. This progress reflects strong outcomes in knowledge and technology outputs. These gains are directly relevant to biopharma, diagnostics, and digital health sectors. Moreover, India currently spends only 0.6–0.7% of GDP on R&D, far below the global average of 2.67%. The RDI scheme aims to close this gap by stimulating private sector investment at scale.

Startups and the Healthtech Pipeline

India’s startup ecosystem has grown rapidly. DPIIT-recognized startups rose from roughly 500 in 2016 to more than 2 lakh in 2025. Of these, over 6,000 are deep-tech ventures. Nearly 60% come from Tier-2 and Tier-3 cities. For the healthcare industry, this means a broad pipeline of healthtech, diagnostics, AI-in-healthcare, and MedTech startups. These ventures are ready to integrate into hospital, lab, and public health workflows over the coming decade.

What This Means for India’s Healthcare Future

Collectively, the PLI scheme, RDI Fund, and ANRF create a layered ecosystem for healthcare innovation. Each scheme addresses a different stage — manufacturing capacity, R&D financing, and research collaboration. Together, they accelerate India’s transition from a cost-competitive generics hub to a high-value, innovation-led healthcare powerhouse. As global demand for advanced therapeutics, diagnostics, and affordable MedTech grows, India is positioning itself to move up the value chain — from contract manufacturing to proprietary product development.