In a landmark move that designates India as its third “home market” after the UK and the US, British engineering giant Rolls-Royce announced a $1.2 billion investment in the Indian defense and aerospace sectors on February 12, 2026.
The announcement followed a high-level meeting between Rolls-Royce CEO Tufan Erginbilgic and Prime Minister Narendra Modi in New Delhi on February 11, focusing on co-developing next-generation military technology under the Atmanirbhar Bharat initiative.
Strategic Pillars of the Investment
The investment marks a shift from a supplier-buyer relationship to one of “co-creation” and joint ownership of Intellectual Property (IP).
1. Next-Gen Fighter Jet Engines (AMCA)
The centerpiece of the deal is the co-development of a high-thrust engine for India’s Advanced Medium Combat Aircraft (AMCA).
- IP Sharing: Unlike previous deals with global manufacturers, Rolls-Royce has committed to sharing the core engine technology and joint IP, ensuring India has long-term strategic autonomy over its fifth-generation fighter fleet.
- Manufacturing Hub: The goal is to design and build these engines entirely within India.
2. Naval Propulsion & Electric Warships
Rolls-Royce is leveraging its MT30 marine gas turbine technology (the world’s most power-dense naval engine) to support the Indian Navy.
- Electric Propulsion: The company is in advanced talks to help design India’s first full-electric warship, similar to the technology used in the UK’s HMS Prince of Wales.
- HAL Partnership: A formal MoU with Hindustan Aeronautics Limited (HAL) will see the two companies work together on marine applications for the first time.
3. Land Systems & Tank Engines
The investment also covers the “heavy land” segment through two additional MoUs with Indian Defense PSUs:
- Arjun Main Battle Tank: Manufacturing engines for current and future variants of the Arjun tank.
- Combat Vehicles: Development of power systems for the Next-Generation Main Battle Tank (NGMBT) and support vehicles.
Infrastructure & Workforce Expansion
To support this $1.2 billion push, Rolls-Royce is radically scaling its physical and human footprint in India.
| Metric | Current (2025) | Target (2027) |
| Total Workforce | ~4,000 | 10,000+ |
| Engineering Hub | Bengaluru (GCC) | Largest globally |
| Local Sourcing | Base Level | 10-fold increase |
The Bengaluru GCC
The company’s Global Capability Centre (GCC) in Bengaluru is being expanded into the largest facility of its kind in the world. It will serve as the primary R&D engine for not just Indian projects, but for Rolls-Royce’s global aerospace and defense programs.+1
Why This Matters: The “Home Market” Status
By declaring India a “home market,” Rolls-Royce is placing the country at the core of its global growth strategy. This status implies:
- Full Value Chain: Presence from initial design and R&D to final assembly and service.
- Technology Sovereignty: Allowing India to export shared technologies to “friendly third countries.”
- Supply Chain Integration: Indian suppliers like Bharat Forge and HAL are being integrated directly into Rolls-Royce’s global supply chain for civil and military engines.
“India is no longer just a market for us; it is a global hub for engineering and manufacturing. Our goal is to build a defense ecosystem in India that is as robust as our operations in the UK and US.” — Tufan Erginbilgic, CEO of Rolls-Royce
