Rolls-Royce targets 60:40 split as India’s non-govt demand for MTU power systems surges

Rolls-Royce expects non-governmental business in its India power systems vertical to outgrow its traditionally dominant government supplies by 2026–27, driven by rising demand from data centres, semiconductor facilities and other critical backup installations, according to senior company officials.

The multinational firm, which operates in India through the MTU brand under its power systems business, is marking 25 years in the country with over 2,600 engines and gensets deployed across naval and land defence, mining and power generation sectors.

“India for us, from a power systems perspective, the focus was Navy, Army, servicing the products, as well as some mining business and some emergency backup power for some hospitals, or some critical infrastructure,” Giovanni Spadaro, President, Global Markets Rolls-Royce Power Systems and Managing Director, Rolls-Royce Solutions Asia, told PTI.

He added, “What happened now is that like in most part of the world, the data centre boom has kicked in and is kind of changing the picture of India.”

Historically, the company’s India power systems business was split at around 70 per cent governmental and 30 per cent non-governmental. “The business this year is moving closer to 50-50, and then going forward, the other business will be stronger…” Spadaro said.

Rolls-Royce has identified three non-governmental growth pillars for India — data centres, gas engines and uninterrupted power for semiconductor manufacturing.

When asked when non-government business will surpass government supplies, GS Selwyn, Executive Vice-President, Rolls-Royce India Pvt Ltd, and Managing Director, MTU India Pvt Ltd, said, “Moving forward from (20)26-27 onwards, we’ll be at a level of 60-40, — 60 towards powergen (non-government) and 40 towards governmental, while the overall pie is also growing in terms of the growth.”

Outlining the strategy for India, Selwyn said, “The way we are looking at opportunities in India is number one on national security. We are strengthening national security through our competitively advantaged products both in naval as well as land defence.”

He said the company earlier sourced and sold products but has now signed agreements with three entities to bring propulsion engine production into India and localise requirements for naval and land defence.

On the non-governmental side, Selwyn said, “We were in the backup power solutions and we are continuing to build upon it. The semiconductors and electronic manufacturing services, automotive as well as flexible manufacturing solutions… they all need a critical power backup.”

In the fast-growing data centre segment, he said the company is installing a nearly 170-megawatt facility in Pune “for a large global ‘hyperscaler’”. “We are looking at signing up contracts with large players, global as well as local, in 2026,” he added.

On local manufacturing, Selwyn said, “We have uprooted a complete factory from Germany and brought it to India. We are producing for India, for the world, in Pune a particular series of power generation as well as rail underpack engines.”

These engines are exported to Germany, the US and several Middle Eastern markets, he said, adding that the company has developed a local supply chain in India.

Spadaro said the target is to “double the quantities that we sell of this engine every year over the next three years”.

Responding to a question on the impact of President Donald Trump’s tariff war, Spadaro said, “The US was definitely one of the larger target markets. We have, at the moment, enough engines in the US to handle the volume for this year.”

He added, “If the tariffs would remain on the current levels, it would make it very difficult to sell it to the US, but then we would try to explore other markets than this,” while expressing hope for a “nice trade agreement between India and the US.”

Acknowledging India’s competitiveness in manufacturing, Spadaro said, “We are planning further localisations for some part of some military programs that are imminent.”