New Delhi: The Confederation of Indian Industry (CII) on Sunday proposed setting up an India Development and Strategic Fund (IDSF) — a sovereign-backed, professionally managed institution designed to finance India’s long-term growth, resilience, and global economic security.
According to CII, the IDSF would function as a twin-arm national fund, mobilising long-term capital to strengthen India’s domestic productive capacity while also safeguarding critical economic interests abroad.
The Fund would comprise two coordinated components:
Developmental Investment Arm: This arm would focus on financing long-gestation domestic priorities such as infrastructure, clean energy, logistics, industrial corridors, MSME expansion, education, healthcare, and urban development. It would provide patient equity and blended finance for commercially viable projects requiring long-term commitments and act as an anchor investor to attract pension funds, sovereign wealth funds, and institutional investors from India and overseas.
CII suggested that the existing National Investment and Infrastructure Fund (NIIF) could evolve into this Developmental Arm, leveraging its governance structure and global investor relationships.
Strategic Investment Arm: This arm would focus on acquiring and securing overseas assets vital to India’s long-term economic and security interests. These include energy assets (oil and gas fields, LNG infrastructure, and green hydrogen ventures), critical minerals (lithium, cobalt, rare earths), frontier technologies (semiconductors, AI, biotechnology), and key global logistics and port assets. This would allow India to own and control critical supply chains and technologies rather than depend solely on external sources.
CII estimates that with disciplined design and funding, the IDSF could build a managed corpus of $1.3 to $2.6 trillion by 2047, positioning it alongside the world’s leading sovereign investors.
The proposed capitalisation plan begins with a modest budgetary allocation to establish credibility, followed by systematic channeling of asset monetisation proceeds — from roads, ports, transmission lines, and spectrum — into the Fund instead of one-time fiscal adjustments. Over time, the government could transfer a portion of its equity in select public sector enterprises to the Fund, enabling these entities to support India’s global ambitions rather than serving as disinvestment assets.
CII also suggested that the Fund issue infrastructure, green, and diaspora bonds to attract long-term domestic and international savings and co-invest with multilateral and bilateral partners. Once macroeconomic conditions are stable, a calibrated allocation of a small portion of India’s foreign exchange reserves could be considered for overseas strategic acquisitions, particularly in critical minerals and energy.
To ensure accountability and transparency, CII proposed that the Fund remain majority-owned and strategically controlled by the Government of India, while being managed by a professional board comprising senior government officials and global investment experts. Separate investment committees for each arm would ensure focused decision-making.
CII also recommended the publication of an annual “IDSF Review”, featuring a public dashboard tracking corpus size, sectoral and geographic exposure, and performance metrics.
CII Director General Chandrajit Banerjee said the proposal recognizes that India’s ambitions in infrastructure, energy transition, manufacturing, technology, and human development require funding far beyond annual budget allocations.
“The Fund would help mobilise domestic and global savings and recycle national capital from mature assets into new productive capacity,” he said.
