Forecast Period | 2027-2031 |
Market Size (2025) | USD 5.85 Billion |
CAGR (2026-2031) | 17.57% |
Fastest Growing Segment | Online |
Largest Market | North |
Market Size (2031) | USD 15.41 Billion |
Market Overview
India Air Conditioners Market size was valued at USD 5.85 Billion in 2025 and is expected to reach USD 15.41 Billion by 2031 with a CAGR of 17.57% during the forecast period.
Residential air conditioners dominate the AC market in India due to the growing household sector, expansion of new housing developments, and the rise of small and medium enterprises (SMEs). Additionally, an increase in construction projects across metro and tier-2 cities is expected to drive demand for air conditioners in the coming years.
In terms of market segmentation, split ACs held the largest share of the room AC market in India by both revenue and volume in 2021. This was driven by consumer preference for energy-efficient products and their growing adoption in residential homes and SMEs. The AC market share in India is being shaped by the expansion of the residential sector, the primary consumer of air conditioners. Improved living standards have also significantly increased demand for air conditioners in residential settings. The commercial sector, another key end user, has seen substantial growth in the last decade.
India has experienced more than 700 heatwaves in the past 50 years, with this summer's heat being among the most extreme. According to the Council on Energy, Environment and Water (CEEW), 97% of Indian households have electricity, and 93% rely on fans for comfort. However, in 2024, the AC market saw an unprecedented surge. Air conditioner sales are expected to increase by 60% from March to July, compared to the typical 25% to 30% growth in previous years. In the past, peak sales in the AC market occurred in the final week of May.
The International Energy Agency (IEA) forecasts that by 2050, home air conditioner ownership in India will increase nine-fold, surpassing the growth of ownership of other household appliances such as TVs, refrigerators, and washing machines. This expansion in air conditioner usage will push India's total electricity demand from home air conditioners to exceed Africa's current total electricity consumption, underscoring significant shifts in the country's energy consumption patterns driven by the AC market.
Key Market Drivers
Rising
Household Sector and Urbanisation
A primary driver of the Indian AC market is the growing strength of the household sector, combined with rapid urbanization. As more Indians move to urban areas in search of better job opportunities and improved lifestyles, the demand for residential infrastructure, including air conditioning, has surged. Urbanization increases not only the demand for housing but also disposable income among urban households. This economic upliftment enables more families to afford air conditioning units, driving market growth. Urban areas, especially metro cities and tier-2 cities undergoing significant development, are seeing a substantial rise in AC installations, both in new constructions and existing homes undergoing renovations to meet modern living standards. This demand increase also intensifies competition among manufacturers, influencing the market share of AC brands as companies strive to capture growing consumer segments.
Additionally, urbanization brings lifestyle changes that prioritize comfort and convenience. In India's climate, where summers are often harsh with high temperatures and humidity, air conditioning has become essential for maintaining comfort and productivity indoors. This cultural shift towards viewing AC as a necessity, rather than a luxury, further boosts market demand. Moreover, the increasing number of nuclear families and dual-income households in urban areas contributes to the rising demand for residential air conditioners. With both partners working, there is a stronger inclination to invest in appliances that improve home comfort and quality of life. In summary, the growing household sector and urbanization in India are significant drivers of the AC market, spurring housing demand, boosting disposable incomes, and fostering a cultural shift toward air conditioning as a vital part of modern living.
- India’s disposable personal income surged to 296,383,300 INR million in 2023, reflecting increased purchasing power.
- The urban population in India for 2024 stood at 534,916,498 marking a 2.97% increase from 2023.
Expansion
of Housing Societies and Real Estate Development
The construction of new housing societies and the overall expansion of India’s real estate sector play a crucial role in driving demand for air conditioners. New mid-income and premium developments increasingly feature AC-ready electrical systems, dedicated outdoor-unit spaces, and growing buyer expectations for comfort. For example, the government-led urban upgrading under the Smart Cities Mission is expanding modern, services-intensive built environments across 100 cities. As of May 9, 2025, the Government of India reported that 7,555 of 8,067 projects had been completed, involving ₹1.51 lakh crore of work. This has led to an increase in upgraded apartments, offices, retail spaces, and public facilities, where mechanical cooling is becoming standard.
Developers in these new housing societies often include provisions for split ACs or centralized cooling as part of the amenity package to attract middle-class and high-income buyers. This approach directly translates real estate development and upgrades into a higher number of AC installations. Additionally, construction-linked demand is supported by policy-backed efficiency improvements, making higher-spec split ACs more attractive in new builds. The Bureau of Energy Efficiency’s star labeling program reports energy-efficiency improvements of 43% at the 1-star level and 61% at the 5-star level for split ACs.
Heat stress is also driving upgrade cycles from fans to ACs among households that can afford it. According to the Council on Energy, Environment and Water (CEEW), 97% of Indian households have electricity access, and 93% rely on fans for comfort, indicating a large electrified base where comfort cooling upgrades are feasible as incomes rise. Reflecting the combined effect of heat, rising comfort expectations, and built-space expansion, 2024 saw an unusually sharp spike in AC demand, with sales expected to grow by around 60% from March to July, compared to the typical 25% to 30% growth in previous years.
Rise of Small and Medium Enterprises (SMEs) and Commercial
Sector Growth
The growth of small and medium enterprises (SMEs) and the broader commercial sector in India significantly impacts the demand for air conditioners. SMEs, which form the backbone of the Indian economy, contribute substantially to employment generation and industrial output across sectors such as manufacturing, services, and retail. SMEs typically operate in office spaces, warehouses, and production facilities that require controlled indoor environments to optimize productivity and ensure employee comfort. As these enterprises expand and modernize their infrastructure, the installation of air conditioning systems increases to maintain suitable working conditions year-round.
As of December 2024, 0.66 million MSMEs employing approximately 2.81 million people have been registered on the Udyam Registration Portal and Udyam Assist Platform (UAP), according to the Ministry of MSME. This growing base of micro, small, and medium enterprises plays a significant role in driving demand in the Indian air conditioner market. With increased digitization, operational scaling, and workplace modernization, many MSMEs, especially in sectors like manufacturing, services, retail, and hospitality, are investing in air conditioning to improve employee comfort, productivity, and customer experience.
Additionally, the commercial sector, which includes corporate offices, IT parks, shopping malls, hotels, and healthcare facilities, also drives substantial demand for air conditioning solutions. Businesses in these sectors prioritize creating comfortable, inviting environments for employees, customers, and guests, which directly translates into increased demand for HVAC systems. The adoption of air conditioning in commercial spaces is not only for comfort but also for operational efficiency and sustainability. Modern air conditioning systems offer energy-efficient solutions that help businesses reduce operational costs and comply with environmental regulations aimed at reducing carbon emissions.
The hospitality industry, including hotels and restaurants, heavily relies on air conditioning to provide a pleasant experience for guests, ensuring their comfort during their stay or visit. Similarly, healthcare facilities require precise temperature and humidity control to maintain sterile conditions and patient comfort, making air conditioning systems indispensable in these settings. Additionally, the rise of retail chains and shopping centers across urban and semi-urban areas further fuels the demand for air conditioning units. Retailers prioritize creating a conducive shopping environment to attract foot traffic and enhance the overall shopping experience, making efficient cooling solutions essential.
.webp)
Download Free Sample Report
Key Market Challenges
Affordability
and Price Sensitivity
Affordability remains a critical challenge in the Indian AC market, particularly among price-sensitive consumers. While the middle class is expanding and disposable incomes are rising, a significant portion of the market still finds air conditioners expensive. High upfront costs for purchasing and installing AC units can deter potential buyers, especially in lower-income segments and smaller cities, where affordability is a primary concern. Additionally, operational costs, including electricity consumption, maintenance, and servicing expenses, add to the overall cost of ownership. In a country where energy prices fluctuate, consumers are cautious about ongoing costs, which influence their purchase decisions.
To address affordability, it is essential to offer competitive pricing along with financing options and incentives that make air conditioners more accessible. Government subsidies for energy-efficient appliances or partnerships with financial institutions to provide affordable loans could help mitigate this challenge.
Energy Efficiency and Environmental Impact
Energy efficiency is a critical concern in the AC market due to its direct impact on electricity consumption and environmental sustainability. India faces the dual challenge of meeting the rising demand for cooling while reducing greenhouse gas emissions and mitigating climate change. Traditional air conditioning units, especially older models, are typically less energy-efficient, leading to higher electricity consumption and operational costs. This strains the electricity grid and contributes to carbon emissions, exacerbating environmental concerns.
Regulatory frameworks, such as the Bureau of Energy Efficiency (BEE) star rating system, encourage the production and purchase of energy-efficient air conditioners. However, widespread adoption remains a challenge, particularly due to competitive pricing pressures and consumer preferences for lower upfront costs over long-term savings. To overcome this, stakeholders manufacturers, policymakers, and consumers must collaborate to raise awareness about the benefits of energy-efficient appliances, incentivize adoption with subsidies and tax incentives, and drive innovation in cooling technologies that minimize environmental impact.
Infrastructure Constraints and Power Supply Reliability
The reliability and adequacy of electricity supply present significant challenges to the AC market in India. Despite improvements in power generation and distribution infrastructure, parts of the country still experience frequent power outages, voltage fluctuations, and inadequate grid capacity during peak demand. An inconsistent power supply disrupts AC unit operation, increases maintenance costs, and reduces lifespan. Additionally, the need for backup solutions, such as generators or inverters, raises the overall cost of ownership, further reducing affordability.
Addressing infrastructure constraints requires continued investment in upgrading the electricity grid, integrating renewable energy sources to meet cooling demand sustainably, and implementing demand-side management strategies to optimize energy use during peak periods. Furthermore, advancements in energy storage technologies and smart grid solutions can enhance grid reliability, enabling more efficient and reliable operation of air conditioning systems in areas prone to power disruptions.
Key Market Trends
Affordability
and Price Sensitivity
Affordability remains a critical challenge in the Indian AC market, particularly among price-sensitive consumers. While the middle class is expanding and disposable incomes are rising, a significant portion of the market still finds air conditioners expensive. High upfront costs for purchasing and installing AC units can deter potential buyers, especially in lower-income segments and smaller cities, where affordability is a primary concern. Additionally, operational costs, including electricity consumption, maintenance, and servicing expenses, add to the overall cost of ownership. In a country where energy prices fluctuate, consumers are cautious about ongoing costs, which influence their purchase decisions.
To address affordability, it is essential to offer competitive pricing along with financing options and incentives that make air conditioners more accessible. Government subsidies for energy-efficient appliances or partnerships with financial institutions to provide affordable loans could help mitigate this challenge.
Energy Efficiency and Environmental Impact
Energy efficiency is a critical concern in the AC market due to its direct impact on electricity consumption and environmental sustainability. India faces the dual challenge of meeting the rising demand for cooling while reducing greenhouse gas emissions and mitigating climate change. Traditional air conditioning units, especially older models, are typically less energy-efficient, leading to higher electricity consumption and operational costs. This strains the electricity grid and contributes to carbon emissions, exacerbating environmental concerns.
Regulatory frameworks, such as the Bureau of Energy Efficiency (BEE) star rating system, encourage the production and purchase of energy-efficient air conditioners. However, widespread adoption remains a challenge, particularly due to competitive pricing pressures and consumer preferences for lower upfront costs over long-term savings. To overcome this, stakeholders manufacturers, policymakers, and consumers must collaborate to raise awareness about the benefits of energy-efficient appliances, incentivize adoption with subsidies and tax incentives, and drive innovation in cooling technologies that minimize environmental impact.
Infrastructure Constraints and Power Supply Reliability
The reliability and adequacy of electricity supply present significant challenges to the AC market in India. Despite improvements in power generation and distribution infrastructure, parts of the country still experience frequent power outages, voltage fluctuations, and inadequate grid capacity during peak demand. An inconsistent power supply disrupts AC unit operation, increases maintenance costs, and reduces lifespan. Additionally, the need for backup solutions, such as generators or inverters, raises the overall cost of ownership, further reducing affordability.
Addressing infrastructure constraints requires continued investment in upgrading the electricity grid, integrating renewable energy sources to meet cooling demand sustainably, and implementing demand-side management strategies to optimize energy use during peak periods. Furthermore, advancements in energy storage technologies and smart grid solutions can enhance grid reliability, enabling more efficient and reliable operation of air conditioning systems in areas prone to power disruptions.
Air conditioner market share by brand in India
Rank | Brand Logos | Companies Names |
1 | 
| Voltas Limited |
2 | 
| Daikin Airconditioning India Private Limited |
3 | 
| Blue Star Limited |
4 | 
| LG Electronics India Private Limited |
5 | 
| Samsung India Electronics Private Limited
|
The cumulative
market share of these companies is around 55%.
Segmental Insights
Product
Type Insights
Split air conditioners has emerged as
the dominant segment in the Indian market due to their combination of
efficiency, aesthetics, and adaptability to diverse consumer needs. These ACs
are preferred for their energy-saving capabilities, often equipped with
inverter technology that adjusts compressor speed to optimize cooling while
minimizing electricity consumption. Additionally, split ACs operate quieter
than traditional window units, making them ideal for residential and office
environments where noise levels are a concern. Their sleek indoor units
complement modern interiors and offer flexibility in installation, appealing to
homeowners and businesses alike. Moreover, split ACs are available in a wide
range of capacities, from small rooms to large spaces, providing options to
suit different cooling requirements. This versatility, coupled with their
superior performance and energy efficiency, has cemented split air conditioners
as the preferred choice for consumers seeking reliable, cost-effective cooling in India's varied climate.
Distribution Channel Insights
Multi-branded stores has emerged as the dominant segment in India's air conditioner (AC) market, driven by their extensive reach and diverse product offerings. Retail chains like Croma, Reliance Digital, and Vijay Sales provide consumers with a wide selection of AC brands and models, catering to various preferences and budgets. Their expansive presence across urban and semi-urban areas ensures accessibility and convenience for a broad customer base. These retailers leverage robust supply chains and strategic locations to meet the increasing demand for cooling solutions, especially during peak summer months. By offering competitive pricing, promotional deals, and financing options, multi-branded stores attract cost-conscious consumers seeking value and variety.
Additionally, their ability to stock a diverse range of products, including the latest energy-efficient models, positions them as preferred destinations for AC purchases. The dominance of multi-branded stores reflects a shift in consumer behavior towards organized retail formats that offer comprehensive choices and enhanced shopping experiences. As the Indian AC market continues to grow, fueled by rising temperatures and increasing disposable incomes, multi-branded retailers are poised to maintain their leading position by adapting to evolving consumer needs and technological advancements.
.webp)
Download Free Sample Report
Regional Insights
In the India air conditioners market,
the northern region of the country is a dominant segment due to several
key factors. North India experiences extreme weather conditions, with hot
summers and often humid weather, resulting in high demand for Air Conditioners throughout the year. This climatic influence drives consistent and
substantial sales of fans across residential, commercial, and industrial
sectors.
Moreover, the northern region
encompasses several populous states and metropolitan areas such as Delhi-NCR,
Uttar Pradesh, Punjab, Haryana, and Rajasthan, which collectively constitute a
significant consumer base for Air Conditioner. Rapid urbanization and
infrastructure development in cities like Delhi, Gurgaon, Noida, and Chandigarh
further stimulate demand for cooling appliances, including ceiling fans,
pedestal fans, and air circulators.
The presence of a robust retail network,
including supermarkets, hypermarkets, and specialized electronics stores,
ensures wide availability of Air Conditioner to meet the diverse preferences
and budget considerations of consumers in North India. Manufacturers and
distributors strategically focus on this region to capitalize on its
demographic and climatic advantages, making it a prominent and influential segment
in the India Air Conditioners Market.
Recent Developments
- In January 2026, Samsung announced the launch of its 2026 Bespoke AI WindFree air conditioner lineup in India, comprising 23 models and featuring SmartThings connectivity and AI Energy Mode claims.
- In August 2025, Bosch acquired a 74.2% stake in Johnson Controls-Hitachi Air Conditioning India (JCHAI) and indicated it would make a mandatory open offer for the remaining shares.
- In Jan 2025, Samsung has launched its 2025 Bespoke AI WindFree air conditioner lineup in India, introducing 19 models across various segments. These ACs feature AI-driven cooling, WindFree technology for draft-free comfort, and SmartThings integration for smart home connectivity.
- In March 2025, Sharp Corporation has re-entered India's air conditioner market with the launch of three new series: Reiryou, Seiryo, and Plasma Chill, offering advanced features like 7-stage filtration, 7-in-1 convertible modes, and self-cleaning technology.
- In Feb 2025, Haier India has launched its Kinouchi Limited Edition air conditioners, introducing India's first colourful AC range. Available in Black, Morning Mist, and Moonstone Grey, these 1.6-ton, 5-star-rated models blend modern aesthetics with advanced cooling technology. Key features include AI-driven Supersonic Cooling for rapid temperature drop, Frost Self-Clean for 99.9% sterilization, HEXA Inverter Technology for energy efficiency, and a 20-meter airflow with Turbo mode.
- In April 2024, LG Electronics has introduced its air conditioner lineup in India, featuring the innovative Energy Manager for optimized energy consumption. Available in 1–2 ton capacities, these ACs offer 4-in-1 and 6-in-1 convertible modes, inverter compressors, and smart controls via the LG ThinQ app.
Key Market Players
- Voltas Limited
- Daikin Airconditioning India Private Limited
- Blue Star Limited
- LG Electronics India Private Limited
- Samsung India Electronics Private Limited
- Haier Appliances India Pvt. Ltd
- Johnson Controls-Hitachi Air Conditioning India Limited
- Panasonic Life Solutions India Pvt. Ltd.
- Havells India Limited
- Carrier Midea Private Limited
|
By Product Type
|
By End Use
|
By Distribution
Channel
|
By Region
|
- Splits
- Windows
- VRF
- HVAC Chillers
- Others
|
- Residential
- Commercial/Industrial
|
- Multi-Branded Stores
- Supermarkets & Hypermarkets
- Exclusive Stores
- Online
- Others
|
|
Report Scope:
In this report, the India Air Conditioners Market has
been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- India Air Conditioners
Market, By Product Type:
o Splits
o Windows
o VRF
o HVAC Chillers
o Others
- India Air Conditioners
Market, By End Use:
o Residential
o Commercial Industrial
- India Air Conditioners
Market, By Distribution Channel:
o Multi-Branded Stores
o Supermarkets & Hypermarkets
o Exclusive Stores
o Online
o Others
- India Air Conditioners
Market, By Region:
o North
o South
o East
o West
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents
in the India Air Conditioners Market.
Available Customizations:
India Air Conditioners Market report with the given
market data, TechSci Research offers customizations according to a company's
specific needs. The following customization options are available for the
report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
India Air Conditioners Market is an upcoming report
to be released soon. If you wish an early delivery of this report or want to
confirm the date of release, please contact us at [email protected]