Grover, 50, a veteran who has essayed several memorable roles in Hindi films, will play the role of Le Chiffre in the film based on Ian Fleming's first James Bond book by the same name.
Grover said "to be in Casino Royale would be a real honour to me and my country."
Shooting for the Bond film is due to begin in Prague in February 2006. Grover said although he had commitments around that time, he would drop everything else, if required, to act in the film.
He told the Evening Standard: "In India the character of the villain is so integral to our storytelling. I have always enjoyed playing memorable 'bad men' and which villains are more memorable than Bond villains such as Blofeld from You Only Live Twice and Scaramanga from The Man With The Golden Gun?
Grover added: "I have played so many negative characters in my time that people in India are often too scared to talk to me."
Grover will be the first Indian to act in a Bond film since tennis star Vijay Amritraj and Kabir Bedi played important roles in Octopussy (1983). He has featured in several films outside India including Beeper (2002), a thriller starring Harvey Keitel.
Grover met Prince Charles at Clarence House on Tuesday night and later said: "It was great to meet the prince. He is a man I have much admiration for."