India Development and Strategic Fund's creation proposed: What is it?
What's the story
The Confederation of Indian Industry (CII) has proposed the establishment of an India Development and Strategic Fund (IDSF). The IDSF would be a sovereign-backed, professionally managed institution aimed at financing India's long-term growth and resilience. It is envisioned as a dual-arm national fund that would mobilize long-term capital to enhance India's productive capacity domestically and protect key economic interests globally.
Funding strategy
Funding India's growth ambitions
The CII's proposal comes from the understanding that India's growth ambitions in sectors like infrastructure, energy transition, manufacturing, technology, and human development will need funding beyond annual budgetary allocations. The IDSF would help mobilize domestic and global savings while recycling national capital from mature assets into new productive capacity. "This is not about more borrowing. It is about better capital structuring," said Chandrajit Banerjee, Director General of CII.
Fund structure
Two distinct arms for IDSF
The IDSF is envisioned as having two distinct but coordinated arms. The Developmental Investment Arm shall focus on financing long-gestation domestic priorities like infrastructure, clean energy, logistics, industrial corridors, MSME scale-up, education, skilling, healthcare, and urban infrastructure. This arm would act as an anchor investor for commercially viable projects requiring long-term commitment while crowding in pension funds, sovereign wealth funds, and institutional investors from India and abroad.
Global acquisitions
Strategic Investment Arm
The Strategic Investment Arm of IDSF would acquire and secure overseas assets critical for India's long-term economic and security interests. These include energy assets like oil and gas fields, LNG infrastructure, and green hydrogen partnerships; critical minerals like lithium, cobalt, rare earths; frontier technologies such as semiconductors, AI, biotechnology; key global logistics and port assets. This arm shall give India the ability to act proactively in critical supply chains and technologies shaping the future global economy.
Future prospects
Managed corpus of $1.3-2.6T by 2047
CII believes that with disciplined design and funding, the IDSF could build a managed corpus of $1.3-2.6 trillion by 2047. The proposed capitalisation roadmap includes an initial budgetary allocation to establish credibility, followed by systematic channeling of asset-monetisation proceeds into the Fund instead of one-time deficit reduction. Over time, a portion of the Centre's equity in select public sector enterprises could be transferred to the Fund, making these enterprises instruments for India's global expansion rather than mere disinvestment candidates.
Fund management
Robust governance is the foundation of this concept
CII has emphasized that robust governance is the foundation of this concept. The proposal calls for a statutory India Development and Strategic Fund Act defining the Fund's mandate, capital sources, the withdrawal rules, and disclosure norms. The Fund should retain majority ownership with the Indian government, while being run by a professional board combining senior government representation and global investment expertise. Two distinct investment committees would govern the Developmental and Strategic arms, ensuring clarity of focus and accountability.