India HVAC Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

India HVAC Market Trends & Growth Drivers

Rising Inclination Toward Smart HVAC Systems Is a Key Trend

• One of the key trends in the market is the shifting inclination toward smart HVAC systems. To reduce energy consumption and improve system efficiency, a large number of buyers are adopting smart HVAC systems, which offer better controls (IoT-based controls), building automation, and advanced real-time performance monitoring.
• Smart HVAC systems also provide better temperature variability and remote access, along with preventive maintenance reminders, and improved system efficiency and lifespan.
• In addition, smart systems produce less noise as compared to others. Due to the growing demand for automation in HVAC systems, customers are inclined toward smart HVAC systems.

Growing Residential Construction Sector Is a Key Driver

• The construction sector in India has grown considerably over the past few years. This is attributed to the increase in real estate regulatory reforms, rapid urbanization, and large government projects that offer a significant thrust.
• For instance, the Indian construction sector is expected to reach USD 1.4 trillion by the end of year 2025. Further, as per Invest India, by 2025, India is expected to emerge as the third-largest construction sector, globally.
• The government initiatives for smart cities in the country, which would drive the residential construction sector, propel the demand for HVAC systems, as these are now an important requirement in residential buildings.
• Like room ACs have become necessary in every residential building for cooling, heating appliances, including heat pumps and ventilation systems, are now witnessing a growing demand, predominantly from newly constructed apartments, to keep the room temperature moderate, with respect to the outside temperature.

High Installation Cost Is a Challenge

• The installation cost of an HVAC system, which depends on the room size, equipment capacity, efficiency, and location, is generally quite high.
• Further, the installation costs of ductwork and are also high, due to specific installation requirements and design complexities.
• VRF pipework and specific installation requirements, which vary based on the systems offered by different manufacturers, make the installation a complex, tedious, and costly affair.
• Furthermore, the life expectancy of a VRF system depends on its installation, which is the most complex step in the whole process.
• Though the installation process is flexible, in terms of connecting multiple indoor units to a single condensing unit, if done in an improper manner, the overall functioning of the system may be affected.
• Hence, high installation cost is one of the factors hindering the HVAC industry growth in India.

India HVAC Market Analysis

Offering Insights

• Based on offering, the service category is estimated to have held a larger revenue share of 60% in the Indian HVAC industry in 2024.
• This is ascribed to the growing demand for maintenance services and installation of HVAC equipment in the country.
• The equipment category holds a significant market share, due to the rise in the demand for such systems from the residential sector and the extreme climate of the country, which results in scorching summers and freezing winters.
• Furthermore, the integration of advanced technologies is propelling the demand for HVAC equipment.
• Under equipment, the cooling category holds the largest share, as estimated, in 2024, owing to the subtropical climate in most parts of the country.
• Moreover, the high temperatures during summers in the northern region, increasing humidity levels in the western and southern parts of the country, and rapidly increasing disposable income are the key factors driving the air conditioning market in the country.
• In addition, the expansion of small and medium enterprises (SMEs) and commercial hubs and government projects, such as the Smart Cities Mission, is fueling the product demand.

Offerings covered in the report include:

• Equipment
  • Heating
  • Ventilation
  • Cooling (Largest and Fastest-Growing Sub-Category)
• Services (Larger and Faster-Growing Category)
  • Upgradation/replacement (Largest Sub-Category)
  • Maintenance & repair (Fastest-Growing Sub-Category)
  • Installation
  • Consulting

End User Insights

• By end user, the commercial category is estimated to have accounted for the largest revenue share, of around 45%, in 2024, and it is expected to grow significantly during the forecast period. This is due to the rise in the number of shopping complexes and corporate offices in the country.
• The increasing number of high-rise buildings, as well as shopping complexes, malls, and hypermarkets, in tier-II cities, is a key driving factor for the market growth in this category.
• On the basis of commercial end users, the market is classified into offices and buildings, supermarkets/hypermarkets, government, healthcare, hospitality, transportation, and others.
• Among these, the office and buildings category dominate the market. This is attributed to the increasing construction of new office buildings in the country.
• Based on industry, the market is categorized into oil and gas, food and beverage, automotive, energy and utilities, and others, wherein others include the electronics, textile, pharmaceutical, manufacturing, glass, pulp and paper, shipbuilding, machinery, steel, cosmetic, rubber, tobacco, nuclear, toy, arms and ammunition, and chemical and cement industries.
• Among these, the food and beverage category hold the largest revenue share. This is attributed to the growing food service sector in the country, buoyed by the young and working population, who eat out more often.

The following end users are included in the report:

• Commercial (Largest Category)
• Industrial
• Residential (Fastest-Growing Category)

North India Is the Largest State Market

• North India is estimated to have held the largest revenue share, of around 35%, in the Indian HVAC Industry in 2024. This is because this region has extremely hot weather conditions in states such as Delhi, Haryana, and Uttar Pradesh, and cold weather conditions in states such as Uttarakhand, Himachal Pradesh, and Jammu & Kashmir (Union Territory).
• Different climatic zones in the region demand different HVAC systems; for cold areas, heating equipment, such as heat pumps, is of the utmost importance for most part of the year. Similarly, for hot and humid areas, cooling equipment, such as room ACs, is important.
• Further, due to the rising disposable income in the region, the standard of living of the middle-class population is improving. On account of this, the spending on consumer goods, especially HVAC systems, is also increasing.
• Thus, the varied climatic conditions and rising disposal income in the region are expected to push the demand for HVAC systems in the coming years.
• The northern region of the country has hot weather for 8−9 months, with about two months of extreme humidity, which drives the demand for air conditioning systems.
• In addition, the construction sector is proliferating, with thousands of kilometers of roads and highways under construction, which will, in turn, give a boost to residential and hospitality construction.
• Similarly, the railways and airports sectors are witnessing significant development and renovation, thereby leading to the augmentation of the HVAC industry.
• Whereas, the market in West India is expected to grow at the highest growth rate of 16.7% during the forecast period. This can be ascribed to the presence of large-scale manufacturing, automotive, and pharmaceutical companies in Pune, Mumbai, Nagpur, Ahmedabad, and other major cities of the region.
• Also, energy-efficient HVAC systems, including room ACs and ventilation fans, are highly preferred in the hot dry climate of the region.
• Along with the aforementioned factors, the development of commercial spaces, such as metro stations, and real estate reforms are driving the market in the region.

Further, regions analysed for this report include:

• South India
• West India (Fastest-Growing Regional Market)
• North India (Largest Regional Market)
• East India

India HVAC Market Share

The Indian HVAC market is highly competitive, wherein the competition is primarily based on price, energy efficiency, reputation, quality, and technical know-how. Companies are aggressively investing in increasing production capacity, developing dealer networks, and introducing new products, to cater to the surging demands. Further, they are continuously launching new products to stay ahead of their competitors.

India HVAC Industry News

• In February 2024, CEO Warrior announced an agreement with Daikin Industries Ltd.
• In March 2024, Havells increased its production capacity and opened a new air conditioner manufacturing factory in Sri City.
• In May 2023, Mitsubishi Electric Corporation signed an agreement to open a manufacturing facility in Tamil Nadu.
• In June 2023, Daikin Industries Ltd. Launched a new range of split room ACs in Chennai.