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.
Due to the growing strength of the household sector, the expansion of new housing developments, and the growth of SMEs, residential air conditioners dominate the AC market in India across all segments. Moreover, the surge in construction projects in both metro and tier-2 cities is expected to boost demand for air conditioners in the coming years.
Regarding market segmentation by residential type, split ACs secured the largest share of the room Air Conditioners Market in terms of both revenue and volume in 2021. This was driven by shifting consumer preferences toward energy-efficient products and their increasing adoption in residential and SME sectors. The AC market share in India is also being shaped by the robust expansion of the residential sector, which is the primary end user of air conditioners. Improved standards of living among Indian consumers have significantly increased the demand for air conditioners in residential settings. Additionally, the commercial sector, another key end-user, has experienced substantial growth over the past decade.
Over the last five decades, India has experienced more than 700 heatwaves, with experts suggesting that this summer's extreme and persistent heat ranks among the most severe. According to the Council on Energy Environment and Water (CEEW), 97% of Indian households have electricity, and 93% rely on fans for comfort. However, year 2024 has seen an unprecedented surge in India's air conditioning market. Sales of air conditioners are expected to increase by 60% from March to July, compared to the typical 25-30% growth in previous years, according to Mr. Thiagarajan's estimates. About a decade ago, peak sales occurred in the last week of May.
The International Energy Agency (IEA) predicts that by 2050, home air conditioner ownership in India will increase nine-fold, surpassing the growth of ownership for all other household appliances such as TVs, refrigerators, and washing machines. This growth in air conditioner use is projected to push India's total electricity demand from home air conditioners above Africa's current total electricity consumption, underscoring evolving energy consumption patterns.
Key Market Drivers
Rising
Household Sector and Urbanisation
One of the primary drivers of the Indian AC market is the growing strength of the household sector, coupled with rapid urbanisation. As more Indians move into urban areas in search of better employment opportunities and improved lifestyles, the demand for residential infrastructure, including air conditioning, has surged. Urbanisation not only increases the demand for housing but also raises disposable income among urban households. This economic upliftment enables more families to afford air conditioning units, thereby driving market growth. Urban areas, especially metro cities and tier-2 cities undergoing significant development, see a substantial rise in AC installations in both new construction and existing homes undergoing renovations to accommodate modern living standards. This rising demand also intensifies competition among manufacturers, influencing the market share of AC brands in India as companies strive to capture growing consumer segments.
Furthermore, urbanization is accompanied by lifestyle
changes that prioritize comfort and convenience. In India's
climate, where summers can be harsh with high temperatures and humidity, air
conditioning is almost essential for maintaining comfort and productivity
indoors. This cultural shift towards embracing AC as a necessity rather than a
luxury further bolsters market demand. Additionally, the increasing number of
nuclear families and dual-income households in urban areas contributes to the
heightened demand for residential air conditioners. With both partners working,
there is a greater inclination towards investing in appliances that enhance
home comfort and quality of life. In summary, the rising household sector and
urbanisation in India are significant drivers of the AC market,
increasing housing demand, boosting disposable incomes, and fostering a
cultural shift towards air conditioning as an essential part of modern living.
- The total disposable personal income in India surged to 296,383,300 INR Million in 2023, reflecting enhanced purchasing power among consumers.
- India's urban population for 2023 stood at 519,506,163, marking a 2.19% increase from 2022.
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 air-conditioner demand because new mid-income and premium developments increasingly come with AC-ready electrical loading, dedicated outdoor-unit space, and buyer expectations around comfort. For instance, government-led urban upgrading under the Smart Cities Mission is expanding modern, services-intensive built environments across 100 cities, with the Government of India reporting 7,555 of 8,067 projects completed as of 9 May 2025 involving ₹1,51,361 crore of work, which typically increases the stock of upgraded apartments, offices, retail and public facilities where mechanical cooling becomes standard.
Developers in these newer housing societies often position split AC provisions or centralized cooling as part of the amenity package to attract middle-class and high-income buyers, directly translating real estate delivery and upgrades into incremental room AC installations. This construction-linked demand is reinforced by policy-backed efficiency improvements that make higher-spec split ACs more attractive in new builds, with the Bureau of Energy Efficiency’s star labelling program reporting energy-efficiency improvements for split ACs of 43% at the 1-star level and 61% at the 5-star level.
Heat stress is also accelerating upgrade cycles from fans to ACs among households that can afford it, with CEEW reporting 97% of Indian households have electricity access and 93% use 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, pointing to around 60% sales growth during March to July versus the typical 25% to 30% growth in prior 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 form the backbone
of the Indian economy, contributing significantly to employment generation and
industrial output across various sectors such as manufacturing, services, and
retail. SMEs typically operate in office spaces, warehouses, and production
facilities that require controlled indoor environments for optimal productivity
and employee comfort. As these enterprises expand and modernize their
infrastructure, there is a corresponding increase in the installation of air
conditioning systems to maintain suitable working conditions year-round. As of December 2024, USD 0.66 million MSMEs employing approximately USD 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 increasing digitization, operational scaling, and workplace modernization, many MSMEs especially those in sectors like manufacturing, services, retail, and hospitality are investing in air conditioning to improve employee comfort, productivity, and customer experience.
Moreover, the
commercial sector, encompassing corporate offices, IT parks, shopping malls,
hotels, and healthcare facilities, also drives substantial demand for air
conditioning solutions. Businesses in these sectors prioritise 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 merely for comfort but also for
operational efficiency and sustainability. Modern air conditioning systems
offer energy-efficient solutions that help businesses reduce their operational
costs and comply with environmental regulations aimed at reducing carbon
emissions.
The hospitality
industry, including hotels and restaurants, relies heavily on air conditioning
to provide a pleasant experience to 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
proliferation 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 that encourages footfall and enhances
the overall shopping experience, thereby necessitating efficient cooling
solutions.
.webp)
Download Free Sample Report
Key Market Challenges
Affordability
and Price Sensitivity
Affordability remains a critical
challenge in the Indian AC market, particularly in a price-sensitive consumer
base. While the middle-class population is expanding and disposable incomes are
rising, a considerable segment of the market still finds ACs relatively
expensive. High upfront costs of purchasing and installing air conditioning
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, contribute to the overall cost of ownership. In a country
where energy prices fluctuate, consumers are cautious about the ongoing costs of running AC units, which affects their purchase decisions.
Addressing affordability involves not
only offering competitive pricing but also providing financing options and
incentives to make ACs more accessible to a broader segment of the population.
Initiatives such as government subsidies on energy-efficient appliances or
partnerships with financial institutions to provide affordable loans can help
mitigate the affordability 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, like many other countries, faces the dual
challenge of meeting increasing demand for cooling while reducing greenhouse
gas emissions and mitigating climate change. Traditional AC units, especially
older models, tend to be less energy-efficient, leading to higher electricity
consumption and operational costs. This not only strains the electricity grid
but also contributes to carbon emissions, exacerbating environmental concerns.
Regulatory frameworks such as the Bureau
of Energy Efficiency (BEE) star rating system aim to promote energy-efficient
appliances by incentivizing manufacturers to produce and consumers to purchase
higher-rated ACs. However, the widespread adoption of energy-efficient technologies
remains a challenge, particularly amid competitive pricing pressures
and consumer preferences for lower upfront costs over long-term savings. To
overcome this challenge, stakeholders in the AC market, including
manufacturers, policymakers, and consumers, must collaborate to raise
awareness of the benefits of energy-efficient appliances, incentivise
adoption through subsidies and tax incentives, and drive innovation in cooling
technologies that minimise environmental impact.
Infrastructure
Constraints and Power Supply Reliability
The reliability and adequacy of
electricity supply pose 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 periods. An inconsistent power
supply not only disrupts AC unit operation but also increases
maintenance costs and reduces their lifespan. Moreover, the need for backup
solutions such as generators or inverters increases the overall cost of ownership
for consumers, further reducing affordability.
Addressing infrastructure constraints
requires continued investment in upgrading and expanding 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. Additionally, advancements in energy storage technologies and
smart grid solutions can enhance grid reliability and stability, enabling more
efficient and reliable operation of air conditioning systems even in areas
prone to power disruptions.
Key Market Trends
Affordability
and Price Sensitivity
Affordability remains a critical
challenge in the Indian AC market, particularly in a price-sensitive consumer
base. While the middle-class population is expanding and disposable incomes are
rising, a considerable segment of the market still finds ACs relatively
expensive. High upfront costs of purchasing and installing air conditioning
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,
contribute to the overall cost of ownership. In a country where energy prices fluctuate, consumers are cautious about the ongoing costs of running AC units, which affects their purchase decisions.
Addressing affordability involves not
only offering competitive pricing but also providing financing options and
incentives to make ACs more accessible to a broader segment of the population.
Initiatives such as government subsidies on energy-efficient appliances or
partnerships with financial institutions to provide affordable loans can help
mitigate the affordability 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, like many other countries, faces the dual challenge of meeting increasing demand for cooling while reducing greenhouse gas emissions and mitigating climate change. According to the India Cooling Action Plan (ICAP) by the Ministry of Environment, Forest and Climate Change, space cooling demand in India is projected to grow eightfold by 2037–38, making energy efficiency a national priority. Traditional AC units, especially older models, tend to be less energy-efficient, leading to higher electricity consumption and operational costs. This not only strains the electricity grid but also contributes to carbon emissions, exacerbating environmental concerns.
Regulatory frameworks such as the Bureau of Energy Efficiency (BEE) star rating system aim to promote energy-efficient appliances by incentivizing manufacturers to produce and consumers to purchase higher-rated ACs. According to the Bureau of Energy Efficiency (BEE), 5-star-rated air conditioners consume up to 25% less energy than 1-star models. However, widespread adoption of energy-efficient technologies remains a challenge, particularly in the face of competitive pricing pressures and consumer preferences for lower upfront costs over long-term savings. As of 2023, BEE data shows that only around 35% of ACs sold in India were 4-star or 5-star rated, highlighting the need for broader adoption.
Infrastructure Constraints and Power
Supply Reliability
The reliability and adequacy of
electricity supply pose 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 periods. An inconsistent power
supply not only disrupts AC unit operation but also increases
maintenance costs and reduces their lifespan. Moreover, the need for backup
solutions such as generators or inverters increases the overall cost of ownership
for consumers, further reducing affordability.
Addressing infrastructure constraints
requires continued investment in upgrading and expanding 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. Additionally, advancements in energy storage technologies and
smart grid solutions can enhance grid reliability and stability, enabling more
efficient and reliable operation of air conditioning systems even 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]