(MENAFN- Live Mint) New Delhi: The Confederation of Indian Industry (CII) on Sunday proposed the creation of an 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 IDSF is envisioned by the industry body as a twin-arm national fund that would mobilize patient, long-term capital to strengthen India's productive capacity at home while securing critical economic and strategic interests abroad.

The CII said the IDSF could manage a corpus of $1.3–$2.6 trillion by 2047, placing it on par in scale and credibility with the world's leading sovereign wealth funds.

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To be sure, the proposal comes on the heels of mounting challenges India faces both at home and abroad, from sustaining high-quality jobs and energy transition domestically, to navigating intensifying global competition, supply chain realignments, tariff threats, and geopolitical uncertainties.

The proposed fund's Developmental Investment Arm would focus on long-gestation domestic priorities such as infrastructure, clean energy, logistics, MSME expansion, education and skilling, healthcare, and urban development, the CII said in a statement.

It would also provide patient equity and blended finance to commercially viable projects, acting as an anchor investor to attract pension funds, sovereign wealth funds, and institutional investors from India and abroad, it added. Blended finance is a funding 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 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,” said Chandrajit Banerjee, director general of CII, in the statement.

“The India Development and Strategic Fund would be a sovereign-anchored, professionally managed instrument that invests in both national capacity and strategic security,” he added.

Meanwhile, the CII has suggested that the existing National Investment and Infrastructure Fund (NIIF) could be turned into the IDSF, building on its governance framework and established global investor network. The NIIF currently has $4.9 billion in assets under management.

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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 proposed fund's Strategic Investment Arm would acquire and secure overseas assets critical to India's long-term economic and security interests, the CII statement said.

“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,” it added.

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