India's National Association of Software and Services Companies on Friday launched a $25 million innovation fund in collaboration with ICICI Knowledge Park.

Investors include India’s largest software services company, Tata Consultancy Services, the country’s leading private telecom operator, Bharti Airtel, and ICICI Knowledge Park.

On the drawing board for over a couple of years, the Knowledge Park Innovation Fund (NIIF) is finally expected to be operational within the next three months and to attract a first round of investments from 8-10 institutional investors. Follow-on rounds are expected to attract $40 million to $50 million.

NIIF will provide seed stage investments to encourage intellectual property-driven innovations in emerging technologies.

“While the larger firms can invest in innovation, startups and young firms in India often fail to scale up due to the lack of timely availability of seed capital," Kiran Karnik, president of the National Association of Software and Services Companies, said in a statement. 

The fund will also be used to encourage entrepreneurship and enable innovative startups to reach a stage of maturity and faster growth.

"We believe this is an important national initiative required to spur IP creation in emerging technologies," TCS CEO  S. Ramadorai said in the statement.

The fund targets academics, researchers, and other hot  incubators that lead to commercialization of inventions in areas such as wireless technologies, auto electronics, life sciences, energy conservation, technologies, and medical devices.