The Confederation of Indian Industry (CII) has proposed the creation of a sovereign-backed, professionally managed India Development and Strategic Fund (IDSF) to finance India’s long-term growth and global economic security. Conceived as a twin-arm national fund, the proposed institution is aimed at mobilising patient, long-horizon capital to build India’s productive capacity at home and secure critical economic interests abroad.Calling for structural and perpetual sources of long-term capital to go beyond the annual budget cycle, CII Director General Chandrajit Banerjee pitched for a sovereign-anchored, professionally managed instrument to invest in both national capacity and strategic security. The proposed fund is aimed at mobilising domestic and global savings and recycling national capital from mature assets into new productive capacity instead of one-time fiscal use.The proposed IDSF seeks to build a managed corpus in the range of $1.3 to $2.6 trillion by 2047. Its capitalisation roadmap includes a modest initial budgetary allocation to establish credibility, followed by systematic channelling of a share of asset monetisation proceeds—from roads, transmission lines, ports, and spectrum—into the Fund instead of one-time deficit reduction. Over time, a portion of the Government’s equity in select public sector enterprises is proposed to be transferred to the Fund, turning these enterprises into instruments for India’s global expansion. In addition, the Fund aims to issue thematic instruments such as infrastructure, green, and diaspora bonds to mobilise long-term domestic and international savings, while co-investing with multilateral and bilateral partners.The proposal calls for a statutory India Development and Strategic Fund Act defining the Fund’s mandate, capital sources, withdrawal rules, and disclosure norms, with the Fund retaining majority ownership and strategic control under the Government of India, while being run by a professional board combining senior government representation and global investment expertise.The IDSF is envisaged as two distinct but coordinated arms:
The Developmental Investment Arm: To focus on financing long-gestation domestic priorities such as infrastructure, clean energy, logistics, industrial corridors, MSME scale-up, education and skilling, healthcare, and urban infrastructure. The proposed arm aims to provide patient equity and blended finance to commercially viable projects that require long-term commitment. It is intended to act as an anchor investor, crowding in pension funds, sovereign wealth funds, and institutional investors from India and abroad. The suggestion includes evolving India’s existing National Investment and Infrastructure Fund (NIIF) into this Developmental Arm to leverage its governance architecture and global investor base.
The Strategic Investment Arm: To acquire and secure overseas assets critical for India’s long-term economic and security interests. These include energy assets such as oil and gas fields, LNG infrastructure, and green hydrogen partnerships; critical minerals such as lithium, cobalt, and rare earths; frontier technologies including semiconductors, AI, and biotechnology; and key global logistics and port assets.
According to data released by the Reserve Bank of India (RBI), outward foreign direct investment stood at ₹14,086 crore (US$1.63 billion) in May 2025, as displayed on the website of the India Brand Equity Foundation (IBEF). The RBI also reported that outward remittances under the Liberalised Remittance Scheme (LRS) reached a new peak of $29 billion between April 2023 and February 2024, reflecting a 21% year-on-year rise.First Published: Nov 9, 2025 3:51 PM IST
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