Summary

India Commercial Air Conditioning Market Size

The Indian commercial air conditioning market was valued at US$ 1,555.83 million in 2024. It is expected to grow remarkably and reach US$ 6,341.27 million by 2033. This growth will constitute a robust compound annual growth rate of 16.88% from 2025 to 2033. Based on the factors of growing infrastructure development, increasing urbanization, and technological advancement, the market is expected to grow significantly, especially within commercial buildings, healthcare facilities, retail stores, and manufacturing units.


India Commercial Air Conditioning Industry Overview

Commercial air conditioning refers to sophisticated cooling systems designed to control temperature and air quality in large spaces such as offices, hospitals, malls, educational institutions, and industrial facilities. These units are built to handle larger areas, higher occupancy, and complex climate control requirements compared to residential air conditioning. Common types include central air conditioning, variable refrigerant flow (VRF) systems, chillers, and packaged units. Each of these is meant to provide consistent cooling, energy efficiency, and better comfort.

Commercial air conditioning is increasingly being used in India because of urbanization, industrial growth, and increasing temperatures. Office spaces use them to keep employees comfortable and productive, while retail outlets, hotels, and restaurants use them to create a pleasant indoor environment for customers. In the health sector, commercial air conditioning provides hospitals and clinics with sterile and controlled environments. Educational institutions require such systems to produce favorable conditions in which students can learn and industries for handling temperature-sensitive processes. In addition, growing energy efficiency and pushing sustainable infrastructure makes commercial air conditioning essential across most industries in India.


Government Cooling Action Plan in India

India has pioneered the development of a Cooling Action Plan, which was launched in March 2019, becoming the first country in the world to implement such a strategy. This comprehensive plan is designed to reduce the demand for cooling across various sectors. The formulation of the India Cooling Action Plan (ICAP) involved a collaborative, multi-stakeholder approach that aims to coordinate efforts to address cooling needs effectively. These aim at more sustainable Indian cooling and address environmental and efficiency challenges in energy.


Growth Drivers for the India Commercial Air Conditioning Market

Rapid Urbanization and Infrastructure Development

The population in urban India is growing rapidly. This leads to monumental infrastructural development in the cities. They start witnessing the construction of office buildings, shopping malls, hospitals, hotels, and educational institutions, all of which require sophisticated cooling solutions. The demand for energy-efficient and large-scale air conditioning systems has surged as urban spaces grow. Smart cities and high-rise developments further boost this demand. Developers increasingly prioritize sustainable and intelligent cooling systems, aligning with green building certifications and government energy efficiency initiatives, driving commercial air conditioning market growth.


Rising Demand from the Industrial Sector

India’s industrial sector is growing rapidly, with manufacturing, pharmaceuticals, and IT hubs expanding nationwide. These industries demand accuracy in temperature control to ensure product quality and efficiency of operations and to create work-friendly environments. Commercial air conditioning is, therefore, critical in providing cool equipment, controlling heat-sensitive processes, and assuring cleanliness in electronics and health care sectors. Increasing industrialization in tier-2 and tier-3 cities has, thus resulted in adopting high-tech and energy-effective air conditioners, which further added fuel to the growth of this market. Dovetailing with this vision was also the several initiatives taken by the government recently, through which the focus on the building of future infrastructure has come out clear. The Gati Shakti national master plan, with its US$ 1.3 trillion valuation, was a forerunner to usher systemic and effective reforms in the sector and has already shown significant headway.


Technological Advancements and Energy Efficiency Focus

The Indian commercial air conditioning market has been revolutionized by the use of new technologies, including variable refrigerant flow (VRF) systems, IoT-enabled climate controls, and ecologically friendly types of refrigerants. Business concerns engage in smart, energy-efficient systems to decrease the operational costs associated with environmental regulations. Government programs promoting energy conservation, such as BEE ratings, also push up the demand for advanced systems. Energy-efficient solutions have become a priority with rising electricity costs and environmental concerns, driving technological adoption and overall market growth. Voltas launched a new commercial AC product line, which includes Inverter Scroll Chillers having cooling capacities of 12-72 TR, at ACREX India 2024 in Noida during Feb 2024. The chillers use eco-friendly refrigerants.


Challenges for the India Commercial Air Conditioning Market

High Initial Investment Costs

A significant challenge in the Indian commercial air conditioning market is the requirement of a high initial investment for advanced systems. Energy-efficient technologies such as VRF systems and chillers involve significant capital expenditure, making them relatively unaffordable for smaller and medium-sized businesses. Additionally, installation costs for large-scale systems can be prohibitive, especially in tier-2 and tier-3 cities where budget constraints often limit adoption. Despite long-term savings through energy efficiency, the upfront costs deter many businesses, slowing market penetration, particularly in cost-sensitive sectors like retail and small-scale industries.


Energy Consumption and Power Infrastructure Constraints

Commercial air conditioning systems consume significant energy, increasing operational costs and placing pressure on India’s already strained power infrastructure. The unavailability of sustained power supply in various regions, mainly in rural and semi-urban zones, sharply curtails the installation of large air-conditioning systems. Moreover, the increasing price of electricity further disincentivizes organizations to adopt such solutions, especially without adequate government subsidies or incentives. This further complicates the market growth of energy-demand-intensive businesses in such regions that lack strong power infrastructure, leading to this issue.


North India Commercial Air Conditioning Market

The commercial air conditioning market in North India is fueled by the rapid urbanization of cities like Delhi, Gurugram, and Noida. The extreme climate in the region, with hot summers, creates demand for cooling solutions in offices, malls, and healthcare facilities. Infrastructure growth in IT, real estate, and hospitality further expands the market. North India is also witnessing an increased adoption of energy-efficient systems as companies look toward sustainability. However, fluctuations in the power supply and higher installation costs in smaller towns are likely to cap growth in some regions. In March 2024, Whirlpool of India unveiled a new range of ACs equipped with 6th Sense IntelliCool Technology, which adapts to consumers' needs for an optimal cooling experience at the touch of a button.


South India Commercial Air Conditioning Market

The South Indian market has Bengaluru, Hyderabad, and Chennai, which represent significant markets in commercial air conditioning. The region has attracted the IT sector with its industrial expansions and large-scale infrastructure projects. The climate on the coast is full of humidity, increasing the need for the commercial space to get advanced cooling. South Indian focus on smart cities and green buildings further accelerate energy-efficient air conditioning systems adoption. Cost-sensitive markets in rural areas and smaller towns present a challenge, requiring affordable but efficient solutions to go for this target segment. In March 2024, Schneider Electric opened its high-tech cooling factory in Bengaluru, spread over 6.5 acres, with an investment of Rs 100 crore. It will focus on innovative cooling solutions to meet the growing demand in India's data center sector, with 85 percent of its products destined for export, serving data centers and various infrastructure industries.


West India Commercial Air Conditioning Market

West India, including Mumbai, Pune, and Ahmedabad, is a thriving commercial air conditioning market driven by its robust real estate, finance, and industrial sectors. The region's high urbanization and dense population make efficient cooling systems an essential requirement for office spaces, malls, and hospitality establishments. Large industrial hubs are also to be found in Gujarat and Maharashtra requiring large-scale air conditioning solutions for manufacturing and process cooling. The government is focusing on developing smart cities in the region, supporting market growth. However, the growing cost of electricity and reliable power supply will remain as challenges.


Market Outlook for East India Commercial Air Conditioning

East India is a developing market for commercial air conditioning, where the infrastructures are being developed in the cities, and cities such as Kolkata, Bhubaneswar, and Guwahati. With growing retail, healthcare, and educational institutions need advanced cooling solutions in the region, apart from coastal areas experiencing high humidity levels. The market penetration is slow, but there is a reason for it: limited industrialization in rural and semi-urban areas and low purchasing power. However, government investment in infrastructure and connectivity will improve growth opportunities, particularly in tier-2 and tier-3 cities, going ahead.


Company Investment in India air conditioning Industry

In September 2024, Japan's leading air-conditioning manufacturer, Daikin Industries, invested Rs 1,400 crore in its Indian subsidiary. This marks its most significant capital infusion to enhance local production of finished goods and components. According to recent regulatory filings by Daikin Air-conditioning India with the Registrar of Companies, the investment was executed in two phases: Rs 600 crore in June and Rs 800 crore in August.

In October 2023, Carrier, the leader in air conditioning and refrigeration solutions, announced significant investment plans for India. The company's CEO said they will invest another $800 million over five years. This indicates investment by Carrier to expand their activities and strengthen their presence in the Indian market.


Type - Industry is divided into 4 viewpoints:

1. PAC (Precision Air Conditioners)
2. VRF (Variable Refrigerant Flow) Systems
3. Chillers
4. Others (Packaged Systems, Rooftop Units, etc.)


Application - Industry is divided into 5 viewpoints:

1. IT & Data Centers
2. Hospitality Industry
3. Healthcare Facilities
4. Retail and Shopping Malls
5. Others (Educational Institutions, Offices, etc.)


Distribution Channel- Industry is divided into 3 viewpoints:

1. Small Retailers
2. Modern Retail/ MBO
3. Online


Regional Analysis- Industry is divided into 4 viewpoints:

1. North India
2. South India
3. East India
4. West India


All companies have been covered with 5 Viewpoints

1. Overviews
2. Key Person
3. Recent Development
4. Product Portfolio & Product Launch in Last 1 Year
5. Revenue


Company Analysis

1. Voltas Limited
2. Blue Star Limited
3. Havells India Limited
4. Whirlpool of India Limited
5. Godrej and Boyce Manufacturing Company Limited
6. MIRC Electronics Limited
7. Johnson Controls-Hitachi Air Conditioning India Limited

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Table of Contents

1. Introduction

2. Research Methodology

3. Executive Summary

4. Market Dynamics

4.1 Drivers
4.2 Restraints
4.3 Opportunities
4.4 Challenges


5. India Commercial Air Conditioner Market Analysis

6. Market Share Analysis

6.1 By Type
6.2 By Application
6.3 By Distribution Channel
6.4 By Region


7. Market Segmentation Analysis

7.1 By Type
7.1.1 PAC (Precision Air Conditioners)
7.1.1.1 Market Trend
7.1.1.2 Market Forecast

7.1.2 VRF (Variable Refrigerant Flow) Systems
7.1.2.1 Market Trend
7.1.2.2 Market Forecast

7.1.3 Chillers
7.1.3.1 Market Trend
7.1.3.2 Market Forecast

7.1.4 Others (Packaged Systems, Rooftop Units, etc.)
7.1.4.1 Market Trend
7.1.4.2 Market Forecast

7.2 By Application
7.2.1 IT & Data Centers
7.2.1.1 Market Trend
7.2.1.2 Market Forecast

7.2.2 Hospitality Industry
7.2.2.1 Market Trend
7.2.2.2 Market Forecast

7.2.3 Healthcare Facilities
7.2.3.1 Market Trend
7.2.3.2 Market Forecast

7.2.4 Retail and Shopping Malls
7.2.4.1 Market Trend
7.2.4.2 Market Forecast

7.2.5 Others (Educational Institutions, Offices, etc.)
7.2.5.1 Market Trend
7.2.5.2 Market Forecast


8. Market Analysis by Distribution Channel


8.1 Small Retailers
8.2 Modern Retail/ MBO
8.3 Online


9. Regional Analysis

9.1 North India
9.1.1 Market Trend
9.1.2 Market forecast

9.2 South India
9.2.1 Market Trend
9.2.2 Market forecast

9.3 East India
9.3.1 Market Trend
9.3.2 Market forecast

9.4 West India
9.4.1 Market Trend
9.4.2 Market forecast


10. Key Players Analysis

10.1 Voltas Limited

10.1.1 Overviews
10.1.2 Key Person
10.1.3 Recent Development
10.1.4 Product Portfolio & Product Launch in Last 1 Year
10.1.5 Revenue

10.2 Blue Star Limited
10.2.1 Overviews
10.2.2 Key Person
10.2.3 Recent Development
10.2.4 Product Portfolio & Product Launch in Last 1 Year
10.2.5 Revenue

10.3 Havells India Limited
10.3.1 Overviews
10.3.2 Key Person
10.3.3 Recent Development
10.3.4 Product Portfolio & Product Launch in Last 1 Year
10.3.5 Revenue

10.4 Whirlpool of India Limited
10.4.1 Overviews
10.4.2 Key Person
10.4.3 Recent Development
10.4.4 Product Portfolio & Product Launch in Last 1 Year
10.4.5 Revenue

10.5 Godrej and Boyce Manufacturing Company Limited
10.5.1 Overviews
10.5.2 Key Person
10.5.3 Recent Development
10.5.4 Product Portfolio & Product Launch in Last 1 Year
10.5.5 Revenue

10.6 MIRC Electronics Limited
10.6.1 Overviews
10.6.2 Key Person
10.6.3 Recent Development
10.6.4 Product Portfolio & Product Launch in Last 1 Year
10.6.5 Revenue

10.7 Johnson Controls-Hitachi Air Conditioning India Limited
10.7.1 Overviews
10.7.2 Key Person
10.7.3 Recent Development
10.7.4 Product Portfolio & Product Launch in Last 1 Year
10.7.5 Revenue