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GRSE engine division is the company's smallest division with respect to revenue. GRSE engine production division undertakes assembly, testing, servicing and repair of various models of diesel engines used for marine propulsion and power generation through collaboration with the MTU of Germany. GRSE produces the following products through the company's engine division MTU 396-04, 4000, 1163, 538, and 183 series diesel engines, engine components, and accessories. The shipyard has recently entered into a memorandum of understanding with an engine production entity for producing small to medium capacity (50-500 Kw) engines.

GRSE supply and overhaul MTU 396-04; MTU 4000; MTU 1163; and MTU 538 class diesel engines through our engine production division at DEP. The company has recently modernized the assembly and testing facilities for marine engines unit at DEP with an investment of around ₹100 million. Consequent to this, a service partner agreement was signed with MTU (India) for undertaking W6 routines of MTU 4,000, MTU 538 and MTU 396 series engines. The company also has a license agreement with MTU Germany for semi knocked down assembly of MTU 12V/ 16V 4000M90 engines and to produce parts of engines.

In relation to the company's DEP, the Company entered into several arrangements including for transfer of technology and licensing with MTU for the production of high speed and high power to weight ratio diesel engines for the naval vessels. In collaboration with MTU, GRSE has supplied over one hundred forty-nine (149) engines of various configurations for marine applications and has also carried out overhaul and repair of over eighty-one (81) engines of various series. Further, The company is in the process of indigenizing around 60% of engine parts over the next four (4) to five (5) years under the “Make in India” program.

Further, GRSE has entered into an MoU for development of engines for marine applications with an engine manufacturer in October 2017. The scope of collaboration is to produce diesel engines for diesel alternators for marine applications for Indian Navy and Indian Coast Guard vessels in the range 50-500 kW with an aim towards self-reliance and to promote “Make in India” initiatives. The vast majority of GRSE's engines are supplied to the Indian Navy and Indian Coast Guard.

GRSE source the company's engine production orders through the nomination process and through traditional sales efforts. The company typically deliver it's engines within three (3) to nine (9) months. The company assembles and test engines that GRSE receives in semi-knock-down or full knock-down condition from MTU. The company delivers engines to the customers by long-haul truck. GRSE has collaboration with MTU for supply of engines in semi-knock-down or knock-down condition.