Italian engine maker Lombardini is in talks with automakers like Bajaj, and Mahindra and Mahindra for the supply of diesel engines and said it would make India its export hub.

The company would also invest $10-12 million to set up a research and development hub in the country, Lombardini CEO Giuliano Zucco said.

"We are talking to companies like Bajaj Auto and M&M to supply engines to them...but I cannot give the details at this stage. We have been supplying diesel engines to Piaggio and other three and four-wheeler makers," he said.

The local arm of the Italian firm, which had a joint venture with Greaves earlier, would also augment production capacity at its plant and widen its product portfolio, he said.

At present, the company manufactures 75,000 units per year, which would be doubled in the next 3-4 years, Zucco said, adding "we foresee a remarkable increase in demand and we are ready to meet the increasing need for diesel engines in as diverse applications as automobile, agriculture and construction".

Lombardini, which has invested $24 million so far, would also try to make the Indian facility its design centre, he said.

The capacity expansion was not only aimed at the domestic market but at neighbouring countries as well, he said adding India is witnessing a buoyant growth, especially in auto and agriculture which would have domino's effect in other neighbouring markets as well.