New Delhi-based apex industry body, the Confederation of Indian Industry (CII), has proposed the creation of an India Development and Strategic Fund (IDSF), a sovereign-backed institution to finance the long-term growth, resilience, and global economic security of the world’s fastest-growing major economy.
A sovereign-backed fund is a state-owned investment institution that invests surplus reserves for long-term national benefit. Countries such as Norway (Government Pension Fund Global), Singapore (GIC and Temasek), and Abu Dhabi (Abu Dhabi Investment Authority) have successfully managed and leveraged such institutions to propel the growth of their economies.
According to a CII statement released on Saturday, the professionally managed IDSF is conceived as a twin-armed national fund to mobilise patient, long-horizon capital to build India’s productive capacity at home and secure critical economic interests abroad.
Announcing the proposal, Chandrajit Banerjee, Director General, CII, said, “India is entering a decisive window of opportunity. We are already among the world’s largest economies, but to reach developed-economy status by 2047, we need structural, perpetual sources of long-term capital that go beyond the annual budget cycle.”
CII’s proposal is based on the recognition that India’s growth ambitions in infrastructure, energy transition, manufacturing, technology, and human development will require funding at a scale that cannot be met through annual budgetary allocations alone. The proposed institution would mobilise domestic and global savings and recycle national capital from mature assets into new productive capacity.
“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,” Banerjee added.
Twin Investment Arms
The IDSF is envisaged as comprising two distinct but coordinated arms: the Developmental Investment Arm and the Strategic Investment Arm.
The Developmental Investment Arm would finance long-gestation domestic priorities, such as infrastructure, clean energy, logistics, industrial corridors, MSME scale-up, education and skilling, healthcare, and urban infrastructure. It would provide patient equity and blended finance to commercially viable projects requiring long-term commitment, acting as an anchor investor to crowd in pension funds, sovereign wealth funds, and institutional investors from India and abroad.
CII has suggested that India’s existing National Investment and Infrastructure Fund (NIIF) could be evolved into this Developmental Arm, leveraging its governance architecture and global investor base.
The Strategic Investment Arm would 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, liquefied natural gas (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.
Implementation Roadmap
The industry body’s proposal calls for a statutory India Development and Strategic Fund Act to define the institution’s mandate, capital sources, withdrawal rules, and disclosure norms. IDSF should retain majority ownership and strategic control with the Government of India, 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.
CII also recommends that IDSF publish a periodic ‘IDSF Review’, with a public dashboard on corpus size, portfolio mix, sectoral and geographic exposure, and performance metrics. Annual withdrawal limits should be capped as a percentage of the corpus to prevent fiscal misuse, while independent audit and risk frameworks should manage currency, geopolitical, and governance risks. The institution must be professionally operated but sovereign in purpose, focused on financing development.
Banerjee highlighted the potential role of public sector enterprises (PSEs) within this structure. Instead of treating PSEs solely as sources of disinvestment revenue, they should be empowered as operational arms of IDSF, capable of executing global projects in energy, mining, logistics and technology.
“Our PSEs can become national instruments of outward economic strategy. When backed by IDSF capital and professional management, they can build India’s presence in critical global supply chains,” he emphasised.
CII has asserted that the IDSF is a nation‑building instrument for India’s Amrit Kaal period till 2047. It will help raise the investment‑to‑GDP ratio and crowd in private and institutional capital at scale. By financing green, digital and industrial transformation, and securing critical resources and technologies abroad, it will strengthen the country’s economic and strategic position in the global order. This also aligns with the broader vision of Viksit Bharat 2047, or a developed India by 2047, enabling the country to finance its growth with stability and purpose.