CII Proposes $1.3-2.6 Trillion Fund for India’s Long-Term Growth

The Confederation of Indian Industry (CII) has unveiled a proposal for the establishment of a sovereign-backed financing platform aimed at fostering long-term economic growth in India. Named the India Development and Strategic Fund (IDSF), this initiative seeks to mobilise substantial, patient capital to enhance India’s domestic productive capacity while also securing significant interests overseas.

India stands at a critical juncture in its economic trajectory. According to Chandrajit Banerjee, Director General of CII, the nation, currently one of the world’s largest economies, aspires to achieve developed-economy status by 2047. To realise this ambition, he emphasized the necessity for structural, perpetual sources of long-term capital that extend beyond the limitations of the annual budget cycle.

The IDSF proposal recognizes that India’s growth objectives across various sectors, including infrastructure, energy transition, manufacturing, technology, and human development, require funding that far exceeds current annual budgetary allocations. Banerjee noted, “This is not about more borrowing. It is about better capital structuring, recycling our existing national strength into future assets instead of one-time fiscal use.”

Structure and Focus of the Proposed Fund

The IDSF would consist of two coordinated components: a developmental investment arm and a strategic investment arm. The developmental investment arm will prioritise long-term domestic needs such as infrastructure development, clean energy initiatives, logistics, industrial corridors, and the growth of micro, small, and medium enterprises (MSMEs). CII has suggested integrating the National Investment and Infrastructure Fund (NIIF) into this component for enhanced effectiveness.

Conversely, the strategic investment arm will focus on acquiring vital overseas assets that are crucial for India’s economic and security interests. This includes investments in energy fields, critical minerals, and advanced technologies like semiconductors and artificial intelligence. Banerjee stated, “In a world where energy, minerals, technology, and logistics are increasingly securitized, economic and strategic policy are now part of the same continuum.”

The CII’s proposal calls for the establishment of an IDSF Act, which would clearly define the Fund’s mandate, capital sources, withdrawal norms, and disclosure requirements. While the government would maintain majority ownership and strategic control, the Fund would operate under the management of a professional board composed of senior government officials and global investment experts.

Projected Impact and Funding Mechanisms

CII estimates that the IDSF could build a managed corpus ranging between $1.3 trillion to $2.6 trillion by 2047, positioning it as a formidable player among the world’s leading sovereign investors. The proposed capitalisation strategy includes an initial budget allocation to establish credibility, followed by systematic channelling of asset monetisation proceeds from infrastructure projects such as roads, transmission lines, and ports directly into the Fund. This approach diverges from the traditional use of such proceeds solely for deficit reduction.

Additionally, a portion of the government’s equity in select public sector enterprises could be transitioned to the Fund, converting these assets into strategic instruments for India’s global expansion instead of opting for disinvestment. The Fund could also issue various bonds, including infrastructure, green, and diaspora bonds, to attract long-term savings from both domestic and international investors. It may co-invest with multilateral and bilateral partners and, eventually, utilise a small percentage of India’s foreign exchange reserves for strategic acquisitions in vital sectors like critical minerals and energy.

As India continues on its path toward economic advancement, the establishment of the IDSF represents a strategic initiative aimed at securing sustainable growth and enhancing the nation’s global economic standing.