The joint initiative - Millennium Alliance - will also test technologies developed in India for providing cheap and effective solutions that could be deployed in other developing countries, particularly in Africa.
The focus sectors of the Alliance are basic education, water and sanitation, family planning and reproductive health, maternal and child health, agriculture and clean energy.
"The Alliance will provide innovators with essential resources such as seed funding, business incubation services, networking opportunities and technical assistance and will also facilitate their access to equity, debt and other capital," US Ambassador Nancy Powell said here.
She said the Alliance recognised India's role as a global innovation laboratory in which development innovations can be tested, nurtured, scaled, private and public sector resources and expertise can be leveraged to reduce the cost and increase the reach of development improvements in India and around the world.
"India has contributed USD five million to the alliance, while the USAID has contributed USD 7.5 million," Secretary Technology Development Board Harkesh Mittal told PTI.
He said FICCI, one of the partners in the Alliance, hoped to scale up the fund to USD 50 million in the next 12 months.
The Alliance will also leverage the rural innovations identified by the Honeybee Network of the National Innovation Foundation.
It would fund innovators in two stages - the first tranche of upto Rs 50 lakh to demonstrate financial, administrative and technical viability followed by an award of upto Rs 3.75 crore for implementing a project at a sufficiently large scale to allow for rigorous impact testing.
The funds will be provided in the form of a grant, debt or equity or a combination thereof.
