Rolls-Royce expects the non-governmental business of its power systems division in India to overtake traditionally dominant government contracts by 2026–27, according to senior company officials. The multinational, which sells MTU-branded engines, propulsion systems and distributed energy solutions in India, is focusing on rising demand from data centres, semiconductor plants and other institutional backup-power markets.

Marking 25 years of operations in India, Rolls-Royce’s power systems business now has more than 2,600 MTU engines and gensets in service across naval and land defence, mining and power-generation sectors. Giovanni Spadaro, President of Global Markets for Rolls-Royce Power Systems and Managing Director of Rolls-Royce Solutions Asia, said the company’s traditional Indian focus had been the Navy, Army, servicing operations and mining, with some emergency backup supply for hospitals and critical infrastructure.

He said the rapid expansion of data centres has reshaped the company’s India outlook. From a historical 70 per cent government and 30 per cent non-government split, the mix is moving towards 50-50 this year, with non-governmental business set to strengthen further. Spadaro identified three growth drivers on the non-government side: data centres, gas engines and uninterrupted power for semiconductor manufacturing.

Rolls-Royce India Pvt Ltd Executive Vice-President and Managing Director of MTU India Pvt Ltd, GS Selwyn, said the trend would accelerate, with the ratio expected to reach 60 per cent non-government and 40 per cent government business from 2026–27 onwards, alongside overall market expansion.

On strategy, Selwyn said the company remains committed to national security, supplying competitively advantaged products across naval and land defence. He noted that Rolls-Royce has signed agreements with three entities to localise propulsion engine production in India for both defence segments.

In the non-government market, the company continues to grow its backup power presence, targeting semiconductor and electronics manufacturing, automotive facilities and flexible industrial operations that require critical uninterrupted power. In the expanding data-centre segment, Rolls-Royce is supporting a nearly 170 MW installation in Pune for a major global hyperscaler, with more large contracts expected in 2026.

Selwyn added that Rolls-Royce has relocated an entire factory from Germany to India and is now producing a series of power-generation and rail underpack engines in Pune for domestic and export markets, including Germany, the US and Middle Eastern countries. The local supply chain has been fully developed to support this manufacturing base.

Spadaro said the company aims to double annual engine sales from the Pune facility over the next three years. On the potential impact of US tariffs, he said the company currently has enough engines in the US for this year’s demand but warned that continued high tariffs would make exports difficult. If so, Rolls-Royce would explore other international markets. He added that India’s strong supply-chain capabilities support further localisation for upcoming military programmes.