New Delhi: The Confederation of Indian Industry (CII) on Sunday proposed the creation of the India Development and Strategic Fund (IDSF), a sovereign-backed, professionally managed financial institution aimed at financing the country’s long-term growth and securing its strategic future.
The industry body envisages the IDSF as a two-pronged national fund that would mobilize patient long-term capital to strengthen India’s manufacturing capacity at home while safeguarding critical economic and strategic interests abroad.
The CII said the IDSF could manage a corpus of $1.3 trillion to $2.6 trillion by 2047, putting it on par with the world’s leading sovereign wealth funds in scale and credibility.
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To be sure, the proposal comes on the heels of mounting challenges facing India at home and abroad, from maintaining high-quality jobs and energy transition at home to managing intensifying global competition, supply chain realignment, tariff threats and geopolitical uncertainty.
The development investment arm of the proposed fund would focus on long-term domestic priorities such as infrastructure, clean energy, logistics, MSME expansion, education and skills, healthcare and urban development, CII said in a statement.
It would also provide patient equity and blended funding to commercially viable projects and act as an anchor investor to attract pension funds, sovereign wealth funds and institutional investors from India and abroad, it added. Blended finance is a financing approach that combines concessional capital from public or philanthropic sources with commercial capital from private investors and development finance institutions to make projects financially viable and attractive.
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“India is entering a critical window of opportunity. We are already among the world’s largest economies, but to achieve developed economy status by 2047, we need structural, sustainable sources of long-term capital that go beyond the annual budget cycle,” Chandrajit Banerjee, director general of the CII, said in a statement.
“India’s Development and Strategic Fund would be a sovereignly anchored, professionally managed vehicle that invests in both national capacity and strategic security,” he added.
Meanwhile, the CII suggested that the existing National Investment and Infrastructure Fund (NIIF) could be transformed into an IDSF, based on its governance framework and established global investor network. NIIF currently manages $4.9 billion in assets.
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The IDSF would serve as an anchor investor, drawing in pension funds, sovereign wealth funds and institutional investors from India and overseas, the CII statement said.
The strategic investment arm of the proposed fund would acquire and secure overseas assets critical to India’s long-term economic and security interests, CII said in a statement.
“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, artificial intelligence and biotechnology; and key global assets in logistics and ports,” he added.
