Indias 15 Lakh Crore Darpa Moment For Deep Tech Govindraj Ethiraj The Core Report

TITLE: India’s ₹1.5 Lakh Crore DARPA Moment For Deep Tech | Govindraj Ethiraj | The Core Report CHANNEL: The Core DATE: 2026-05-28 ---TRANSCRIPT--- ANRF is a statutory body. Within it we have funds [music] and you know, potentially organizations which do specific things. RDI is a fund.

In this round of funding the projects that have been identified or the projects that [music] have been funded, what is common to all of them? The focus is for you know, something that involves research development and innovation. So, but at the same time it has already been validated to some extent. We need to revitalize and transform how [music] fundamental research is done in India. So, we’d like it to [music] be more bolder and to be able to do more things at scale. [music] See, I think creating financing is just one part, right? I think there’s a lot of innovation to be done in the whole spectrum of financing and [music] that’s one area where we’ll have direct influence and direct engagement. Hi and welcome to the core reports special edition. The Anusandhan National Research Foundation or ANRF is an apex research funding body which was established by the government of India to really catalyze and manage a massive R&D thrust in a country where obviously there’s not enough R&D expenditure happening. Now, there is a lot of money at stake in all it adds up to almost 1 lakh 50,000 crores but split up in many ways and we’ll find out how and where very soon. But in order to do all of this, I’m I’m joined today by Dr. Shivkumar Kalyanaraman. He’s a veteran technologist and also of course the CEO of the ANRF. Dr. Kalyanaraman, before this used to work as CTO for the energy industry in Asia at Microsoft. He’s also worked as chief scientist for IBM research in Australia. Shivkumar, thank you so much for joining me. So, let me start with what has happened most recently, right? So, the the project has been rolling for some time but a few days ago you’ve released a list of approved projects for which R&D funding could go and there are some big names or well-known names in this including Tejas Networks, Ather Energy, Ideaforge. I mean these are names I could recognize but there are almost 22 ventures or companies and many of them are existing some I’m assuming are newer who are I’m assuming going to receive some funding. So tell us about uh what is going to happen with these companies and these projects and then we can talk about the fund as a whole. First thank you Govind. It’s wonderful to be here at The Core Report and so first the announcement that was made was by the Technology Development Board and TDB which is a what’s called a focused research organization or a second level fund manager in the [clears throat] RDI scheme. The RDI scheme is a scheme announced by the honorable Prime Minister on November 3rd last year and [clears throat] we’ve been rapidly operationalizing it and TDB and BIRAC are the two statutory fund managers which have been named and they were operationalized by end of January. They put out their CFPs and had a call for proposals and then lots of proposals came in and TDB was first out of the gate in terms of making this announcement and there was an event as well recently chaired by the honorable Minister of Finance sorry Minister of Science and Technology Dr. Jitendra Singh where this was announced as well. So this TDB is doing um uh you know capital allocation in the form of either long-term debt or some sort of convertibles or some mix of the above for each of these entities and this is a form of patient capital. Um now we are creating a patient capital asset class by doing this and we believe this is very important to drive the growth of deep tech and especially RDI intensive deep tech. Research, development, and innovation-driven deep tech. Right. And in some of these companies, I mean, the names are not relevant, but what Could you give us a or walk us through some of the projects that they’re going to work on or where this investment would go? See, these are, you know, all the way from the next generation of 6G technology to building 3D printed rockets or, you know, putting out satellites into lower earth orbits space for earth observation or many such examples that are there as well as in the healthcare space and the biotechnology spaces and so on. So, there’s a quite a diversity of entities which have received the funding. And So, this is one class of funding that is coming up, but there will be other classes coming out shortly as well. I’ll and I’ll come to that. So, in this round of funding the projects that have been identified or the projects that have been funded, what is common to all of them? Is it the scale of what they’re doing or is it because these are all moonshots which is why they themselves may not have been able to do or would not have done it? See, it’s important to understand that the RDI fund, the focus is for, you know, something that involves research, development, and innovation. So, but at the same time, it has already been validated to some extent. So, it’s TRL 4 and above and it’s only for commercial organizations. It is not, you know, these are things that go on a balance sheet. These are capital investments that go on a balance sheet. It is to help them with, in this particular case, with patient capital that does not dilute their holdings as well significantly and so on. So, and it provides them capital that allows them to really accelerate their commercialization, uh and uh translation of these uh technologies. And then this will create um and accelerate this uh deep tech class so that India can become a research partner for the world as well as a research innovator and leader in the world. Right. And what would be the average ticket size for these investments? Um so we have given um um these investments which are loans or convertibles anywhere from 50 crores on one end to 250 crores uh and so on. So the um RDI takes only 50% of a project, which means that the project itself would have been a 500 crore project out of which we have done 250 crores. There are uh all kinds of numbers in between Sure. in that range. And and for those who may not have a background and I’m going to ask you to talk about the ANRF broadly as well. This is similar obviously to what DARPA does in the United States. So ANRF um is uh as you mentioned in the introduction, an organization to catalyze the R&D ecosystem uh and the rise of India as an R&D powerhouse. So this means there are different types of um you know, investments we can make. One is a pure investment where we’re looking at returns, but it’s providing patient capital, a form of capital that is not available today. And we’re also trying to catalyze the intermediary asset class uh so that we can create a multiplier effect on this patient capital. The other uh we do is our ANRF core, which does grants like National Science Foundation and increasingly uh more mission mode and focused investments like DARPA. So and we’ll be doing uh we’ll be experimenting with other sorts of blended finance and other uh instruments like contingent grants and so on going forward into the future. And this is also the uh first time that India is doing something like this and the and next question is really at this scale? Absolutely. I think um the ANRF is a path breaking um I would call it an institutional innovation in India. It’s a statutory body. The best way to understand it is when Nandan went to create Adhar. Adhar was a project and UIDAI was the statutory body. Similarly, ANRF is a statutory body. Within it, we have funds and you know, potentially organizations which do specific things. RDI is a fund. It’s a special purpose fund of ANRF. Similarly, we have other funds for doing regular grants. We are actually operationalizing a new fund called an ANRF Innovation Fund which can have more of intermediate characteristics between, you know, at one end it’ll become looks like a grant and the other end it’ll look like capital, right? So, you can have intermediate flavors like blended finance and so on. Right. And and as I can see, you’re really doing this in two phases. One is, let’s say, the initial funding, but now you’re also reaching out to CSR and philanthropy to partner with you. Yeah. So, walk us through how that looks. Yeah, look, I think see, we are trying to solve different multiple sets of problems here with the ANRF, right? One is we need to revitalize and transform how fundamental research is done in India. So, we’d like it to be more bolder and to be able to do more things at scale, right? So, we are increasing the scale up as well as asking our investigators to do bolder things, right? So, that is one class of things we’re doing. We’re investing it investing in a lot of facilities of different scales. This will provide the capital so that lots of exciting research can happen. The next part we’re trying to do is to drive translation Mhm. of this basic research into use cases, into early stage opportunities which can be commercialized, right? Or can have societal impact. So, we are trying to do that through a set of accelerator programs. We call them the Maha class of mission-oriented programs for high impact areas, or we are looking at societal innovation and saying how we can do leapfrog demonstrators. And then we have some translational centers we’re putting in place as well. So, all of these are grants. And then think of all of this as a pipeline. And from here the grants are mostly to the not-for-profit sector, which is the academia, the labs, perhaps the section 8 companies and the the like. And then we’d like to pivot this over to the for-profit sector. So, when the the investments that we made that we talked about earlier, those are investments. Those are not grants. And those are made only to the private sector. So, the theory is that the private sector is the you know, vehicle to really translate scale and really create the ultimate economic opportunities. Whereas the not-for-profit sector, which is the academia, the labs, and so on, are at the earlier stages. So, that we’re trying to blend both of this and make it all work together. Fair. And if you know, India’s a big country and there are thousands of proposals, I’m sure, which have already started flowing in. Where does it meet? Between what you are desiring in thematically and otherwise, that’s horizontally and vertically, versus what you’re seeing in terms of response from everyone around? See, I think the exciting thing is that there’s a lot of you know, sort of interest in what NRF is doing, especially amongst the university community and so on. So, we get a lot of proposals in our grant programs. And there again we are giving the signals of by the way, we are making choices. Now, on the RDI side, since we are operationalizing rapidly, I think the communities are a bit surprised how fast we move. So, I keep joking to private sector, can you move as fast as we are? So, now that hopefully will bring a lot more interest in into the RDI as well. Colleagues at TDB and BIRAC are reporting they’re getting a record amount of applications as well. So, look, I think but at the same time this is just the first first iteration of the first cohort we’re putting out. So, we expect as we are consistent in our investment that will drive more changes in behaviors. Our grantees on one side and our investees on the other side will understand what we are trying to do and we ourselves to be honest have to learn a lot more on how to do this better, how to do this correctly, how to innovate in various forms. Cuz we think of this as a range of investment finance options and the research end of the spectrum, the translational middle ground, and then ultimately the the scale up as well, right? So, I think we’re trying to put together appropriate vehicles for all of these. Right. And you know, if if you’re a for example a venture capital firm, you have a monitoring mechanism as to how things are going, whether things are going, are they going at the right pace. What’s your monitoring mechanism including for what you’ve already rolled out? Yeah, first excellent question. I think overall we are getting our act together in terms of you know, improving our monitoring mechanisms. So, that I would say is still work in progress at various stages. So, one is for our grant mechanisms, typically we would have reports and reporting and some degree of oversight committees that look into things. But we believe that there has to be a lot more careful monitoring, more check-ins as well as you know, more mentoring in addition to the monitoring based on the course corrections needed or pivots needed. So, this is true even for our grant programs and especially for as we start giving larger chunks of grants in the into our more directed programs. So, we need also domain based monitoring. If I have a med tech program, you need direction from med tech expertise. If you do an AI for science and engineering program, you need in the specific expertise. So, we are trying to put together the appropriate kinds of monitoring, appropriate kinds of mentoring on that front. Now, on the investment side, there is a much better ecosystem with a combination of investment committees and so on. But the important thing to realize is that in RDI, since we have a fund of funds structure, the actual investment decisions are made by investment committees and government is not part of that. We have professional investment committees that choose. Yeah. Now, you know, you worked in the private sector. So, if you were to draw on your own experiences in terms of what you wanted to do, let’s say some cutting-edge research when you were in IBM, for example, and what was the facilitating system that helped you do it? Apart from the fact that it was a pure private company. Yeah. What are the lessons from that world to this world? See, I think I worked also in the United States where I was a professor, where you can think really long term and be bold and [clears throat] send a proposal into a National Science Foundation, a completely out of the world ideas. You could go to DARPA and go after a specific solicitation they put out or you know, like a program they put out and so on. So, that’s one class where you can think very long horizon things. In when I was in industry, whether it’s IBM or Microsoft, you would be more either industry led saying, where is the opportunity in the in the industry? Or customer or market led saying that hey, where is that market going? You may may have an overall hypothesis, but you have to come up with a research, but ensure that you’re able to get commitments from the customers to invest in your research co-invest. So, that puts a high bar to ensure that you’re working on the right things. And there is of course a lot more focus on ensuring the impact of what you do. So, so that you know, the experience on both sides have has helped me understand the right balance to be struck because each of them has different horizons and different goals that are needed. So, I feel both are important. Translation is not the only thing that we care about. Fundamental research is also important, but even there you have to step up in terms of ambition and go and you know impact. So if I would ask you what were the top three teams in these 22 companies or others that you’re working on actively? And as an extension to that, not the same question but as an extension to that, one of the things we’re all talking about is AI and whether India is losing the AI race or is lagging in the AI race or which part of AI are we really you know cracking to that extent? Does all of this or all these funds and the efforts here could they be going towards AI linked efforts or AI linked R&D? That’s the second part of the question. I think the specific cohort that is being chosen here probably reflects a bit of space tech, communications. It also reflects you know other areas around health care, applied AI and so on. So if you were to ask for core AI I have to double check the list but we don’t have core AI investment in this specific cohort but you know we do expect more of core AI you know proposals coming in as well and we’d be very happy to consider them. So there are a set of sectors and subsectors that are white listed in the RDI and AI is certainly part of that including its applications. And conversely if the applications that are coming to you which sectors do they represent at least the what are the predominant sectors? So TDP is a broad based second level fund manager so it invites proposals across sectors. So that and they have made certain choices in their investment committee primarily based on actually the best applications that came through. So so this first cohort may not be completely reflective of the full spectrum of possibilities. Yeah. And and let’s say from your own vantage point and everything that you’ve been seeing what has stood out to you? Like what are the kind of projects that have stood out? So, space tech is something that we’re all hearing about uh communications and telecommunications, I’m assuming, and chips. That’s quantum and so on. And that’s something that we’ve been hearing about. Is there anything that you’ve noticed that, you know, is a standout? You say, “Okay, but you know, oh, it’s great that these guys are focusing on this because we don’t otherwise see any interest in that.” See, I think we are seeing unusual companies come through in this, whether it is in terms of AI applied to health tech, whether it’s AI, um or you know, the data and you know, which you can get from space tech from a integrated observation standpoint. Or you know, rocketry or other sorts of things, right? I think it’s a nice blend at this point and it also there is companies like E-Plane, for example, that is looking at you know, sort of combination of drone and aerospace technologies. So, I think all of these are you know, companies that have already started hitting their mark and they are well ready for scale up. So, those are getting the first tranche of funding. So, you’ll see names other names like Agnikul and GalaxEye and E-Plane and so on, so which are some of the other names here. Mhm. Now, you know, one of the criticisms against Indian industry is that it’s not invested enough in R&D. I mean, you know, even whether we compare with bigger countries like China, I mean, economically bigger, or any other benchmark. Obviously, all of this is a response to that and will catalyze R&D. But there also seems to be a bit of a let’s say a dichotomy between the the big guys, who maybe should be or could be doing more R&D, versus the small guys, who are and you are helping them as well. So, do you see some sort of convergence here? Look, I think ARDI does not make a distinction between big or small. We support big projects as well as small projects. We also support big companies or small companies. So, even if I’m a big company with whatever, you know, 10,000 crores of turnover absolutely. You could come to us with a ask and depending upon the first of all it cannot be run of the mill regular R&D. It has to be something really stand out and and it’s not something you would go for a regular debt raise and so on for right? It has the unique R&D characteristics. So that’s what we are investing in. For example, there is stages networks which is part of the Tata group already has been one of the awardees here as well. So look we would invite companies of all sizes as well as entities can do other special arrangements and partnerships such as joint ventures, special purpose vehicles and you know entities can they have to be eligible technology entities as we call them which have to be management controlled by resident Indians but they can have partnerships with you know both the academic side academia to bring in technology transfer or other ongoing arrangements or they can also have some degree of partnerships or technology acquisitions from outside India as well. So all all of that is admissible within RDI. Right and you mentioned academia a couple of times so far. So tell us about what more could we be doing or in addition to what we are doing in terms of supporting and resourcing academic endeavors in all these areas? I think academia the there are two or three very different things we need to do. One is just the distribution of excellence in academia is very I mean narrow. We’d like to broaden out the distribution of excellence for R&D which is high end R&D. So that capability we are seeding you know in many institutions and also pairing up emerging research institutions with the ones which are already doing well. Right? So that’s one class of investments we are doing. The second class of investments is really in our broad based investments we are asking to step up and orient towards impact. So, whatever you do, whether you do fundamental research, early applied research, use case, or use-inspired research, or translational, go for impact. You know, take bolder bets. That’s what we want earlier. So, that sort of the out of the thousand flowers blooming, then there’ll be enough things that can go to the next stage. Third is translation, whether it’s translation for economic benefit or societal benefit or in specific sectors, right? So, these are the kinds of things. So, we believe in investing differently and then helping them appropriately in each of these investments. And then hopefully going forward, we’ll be using other blended finance and other instruments which can have academia and industry working together in new ways as well. Right. And I’m you did say that this is patient capital and that’s the fundamental definition of it. But even within that, you may have or do you have a like a cycle or a pipeline where some things will you know, come earlier versus other things which will take more time. Yeah, absolutely. See, patient capital is of course sometimes misconstrued in different ways, right? [laughter] See, deep tech sometimes requires time, but may require you know, less capital, right? It may be not capital intensive, but it may be time intensive. You need capital that is willing to wait for a longer time. So, that is one class of deep tech. Some others require a combination of time and research intensity. So, your time to first revenue might take longer time. Suppose you’re trying to do a drug discovery and so on, right? You’ll have to go through many rounds of clinical trials. But as you’re hitting certain milestones like you finish phase one to phase two and to you go to phase three, you may suddenly get [clears throat] infusions from you know, larger companies and so on which can allow you to monetize as you go through the various stages. You’ve still not gotten revenue by the way, but you’re just going through the pipeline. So, sometimes it is just time, sometimes it’s a combination of time and and intensity of investments and third, it could also be different kinds of exit options whether it’s through private markets, public markets and you know, global markets as well, right? So, we want to support an ecosystem that you know, can cover all of these things. So, clearly we have a potential large talent pool. We need to get them working together as well as a diaspora pool which is willing to look look here and as a base. And then we have free trade agreements with various parts of the world. So, we have access to markets. So, how do we combine this to create the next IT revolution, right? So, that’s the thinking here. Mhm. So, you know, we are facing a energy crisis and I think I’ve asked you this before as well. So, the what are the big challenges before countries like India is to reduce its exposure to fossil fuel and really rebalance our energy needs and expectations. Are there any interesting projects that have come in this space? Are you yourself looking for them? Absolutely. Energy transition is one of the white listed areas around in RDI and it includes things all the spectrum in terms of renewables and other forms of investments or advanced renewables as well as you know, new ways of applying AI for you know, you know, even offshore discoveries and those kinds of things as well as bio fuels of various kinds and and you know, you know, things at the intersection of agriculture, energy and and new forms of applications as well, right? So, so all of these are within the scope and plus the areas like critical raw materials which are you know, anything that is going to be sensitive from a supply chain perspective. All of these are are parts of this. Advanced manufacturing is also part of RDI. So, have we received enough applications in some of these areas? Not quite. I think we’ll look for look through our different cohorts. And yes, we would encourage a lot more applications in these spaces as well. Right. Last couple of questions. So, in from your own experience, again, just to come back to that. Just one thing. I mean, energy is, for example, one of the awardees this time. That’s kind of Yeah, that’s an example of Yeah, but they’re also interested in energy more more generally as well. Yes. So, just to come back to your own experience as a scientist, what are some of the areas you would like to personally work on today if you could or would in in terms of problem-solving for India? So, look, I have worked at the intersection of AI and energy and in my past. And that and the energy transition and you know, opportunities there are quite immense. And also now having served in the National Research Foundation, I see lots of interesting areas like, for example, how do you do AI not for just a drug discovery and drug design, but you can apply it for biochemical designs, right? How do you design your materials? How do you design your enzymes that can help drive changes and so on. So, you know, we just seem to be the cusp of many discoveries which can also be quickly translated and which will allow hitherto very distinct industries to really come together. Say, for example, the agriculture and the energy industry have been coming together for a while. But that intersection will get, you know, accelerated through the combination of AI and biotechnology, right? The health space and personalized medicine and specific areas like precision oncology or, you know, like we know in obesity and other sorts of areas. The ability to be much more proactively focused on health and preventative health. I think these are excellent areas. And the for India specifically, areas in biologics and, you You like using new platforms like organoids and other sorts of areas, right? I think you know, that just gives a thing of space but at [clears throat] the same time you know, new areas like how do we apply AI in space or how do you take data centers, move them to renewable farms? There are a lot of innovations at the system level or you know, sort of reimagining how some of these energy and the AI space coming together and systems coming together. So, these are I think some of the areas that are interesting to me personally. Okay, that’s a lot. So, last question. So, when you look at everything that you’ve done in the last couple of years, where do you feel we are in terms of the larger race for scientific excellence as a country? I mean, I’d leave you to define it and obviously funding and targeted funding initiatives like this help fill the gap. But there could be other gaps as well. So, in your sense, where do we stand and what’s the unfinished agenda so to speak? See, I think creating financing is just one part, right? I think there’s a lot of innovation to be done in the whole spectrum of financing and that’s one area where we’ll have direct influence and direct engagement. But in addition to that, there are other aspects. How does early stage innovation lead to procurement, for example? And how does it you know, interact with the regulatory environment or regulations, especially in some sectors like you know, the the medical technologies or drugs discovery and so on. So, I think those are I would say those intersections are part of the unfinished agenda. And the same thing about how do we help open up new markets and help drive global collaboration in these spaces as well as provide more exit options for really deep tech. I think these are areas I think but at the same time, how do we scalably aggregate philanthropic capital? How do we scalably intersect with CSR which is actually an area where India has innovated quite a lot. Uh it’s something which I’m quite passionate about. Right. That’s a good note to end on, Kumar. Thank you so much for joining me. Thank you so much. It’s been a pleasure. Thank you. Hi. Indian investors have seen a very strong home market now for several years, and we’ve also seen huge amounts of inflows, particularly into mutual funds and directly into the markets. Now, with volatility rising, currency markets depreciating, I’m talking about the rupee, and of course the global markets looking much stronger, particularly in the United States, Europe, and of course in Asia, investors perhaps need to look at more options than what they’ve had all this while. So, the question now is where should investors invest? [music] How can they distribute and better manage their portfolios compared to what they were doing a few years ago. So, join us in our next closed-door discussion series [music] on navigating market risk, where we focus this time on how you can distribute your portfolio more efficiently at the Quorum on the 2nd of June at 8:30 a.m. That’s Lower Parel, Mumbai.