India Low & Medium Rating Diesel Genset Market, By Rating (Low Rating, Medium Rating), By kVA Rating (5kVa – 50 kVa, 50.1 kVa – 100 kVa, 100.1 kVa – 162.5 kVa), By End User (Residential, Commercial, Industrial) By Region, Competition, Forecast & Opportunities, 2021-2031F

Market Overview

India Low & Medium Rating Diesel Genset Market was valued at USD 615 Million in 2025 and is expected to reach USD 969 Million by 2031 with a CAGR of 7.72% during the forecast period.

A Low and Medium Rating Diesel Genset refers to a category of diesel-powered generator sets designed to provide backup or prime power in applications with moderate energy demands. These gensets are typically rated between 5 kVA and 500 kVA, making them suitable for small to medium-sized facilities such as homes, commercial offices, schools, hospitals, construction sites, and small industrial units.

Low-rating diesel gensets, generally under 100 kVA, are used where power requirements are minimal, often serving as emergency power sources during outages. Medium-rating gensets, ranging from 100 kVA to 500 kVA, are more robust and can support operations with higher load demands, including multiple systems or machines simultaneously.

These gensets are appreciated for their reliability, fuel efficiency, and relatively compact design. They are equipped with automatic or manual start options, soundproof enclosures for noise reduction, and advanced control systems to ensure smooth operation and performance monitoring.

Low and Medium Rating Diesel Gensets are favored in regions with unreliable power grids or remote locations lacking access to utility power. Their ability to run for extended periods and adaptability to various environments make them an essential solution for continuous and standby power applications across multiple sectors.

Key Market Drivers

Inconsistent Power Supply and Grid Infrastructure

One of the primary drivers of the Low and Medium Rating Diesel Genset market in India is the persistent inconsistency in power supply across various regions. Although urban centers have relatively stable electricity infrastructure, many semi-urban and rural areas still experience frequent power outages, voltage fluctuations, and limited access to reliable grid power. This inconsistency makes diesel gensets a vital backup solution for homes, small businesses, healthcare facilities, educational institutions, and local government offices.

Power outages in India often occur due to natural calamities, grid failures, transmission issues, or maintenance work. In many Tier 2 and Tier 3 cities, the power infrastructure is outdated and under stress, especially during peak usage seasons like summer when demand surges due to cooling appliances. Diesel gensets in the low and medium rating range (5 kVA to 500 kVA) are well-suited for such scenarios as they provide immediate backup power without requiring complex setup or space.

India's rapid electrification push under government initiatives like the Saubhagya scheme has extended power access to remote regions, but reliable supply remains a challenge. In these areas, gensets bridge the gap between grid availability and actual energy needs.

Diesel gensets continue to be the go-to option due to their quick response time, ease of maintenance, and capacity to handle sudden power disruptions. Especially in sectors like healthcare and education, where uninterrupted power is essential, gensets provide a dependable alternative to avoid operational downtime. This ongoing demand sustains and expands the market for low and medium rating gensets. According to the Central Electricity Authority (CEA), India faces an average of 50-60 million man-hours of power outages annually, especially in rural and semi-urban areas, where grid infrastructure remains weak.

Growth in the Construction and Real Estate Sector

India's expanding construction and real estate sector is a significant driver of the Low and Medium Rating Diesel Genset market. With the rapid pace of urbanization and infrastructure development, there is a growing need for reliable power sources at construction sites, where grid access is often limited or entirely unavailable. Diesel gensets offer a portable and dependable solution to meet the power demands for lighting, tools, machinery, and site offices.

Construction sites frequently operate in areas where grid electricity has not yet been established. In such locations, diesel gensets serve as the primary power source, especially during the initial phases of development. Low and medium rating gensets, ranging from 15 kVA to 250 kVA, are particularly useful for powering mixers, pumps, welding machines, and temporary shelters or control rooms. In addition, the rise in commercial and residential real estate projects has created a consistent demand for temporary and backup power solutions. Builders use gensets not only during construction but also during the finishing stages and early occupancy periods before grid connections are fully operational or stabilized.

Government-backed infrastructure projects, such as smart cities, metro rail expansions, and affordable housing schemes, are also contributing to this growth. These projects often have strict deadlines and operational requirements that necessitate continuous power availability. Moreover, diesel gensets provide flexibility and mobility that fixed grid power cannot. They can be easily transported between sites and scaled based on load requirements. This flexibility makes them particularly attractive in the fast-paced construction industry, where delays due to power outages can lead to significant financial losses.

As long as construction and real estate activities continue to expand, especially in India’s growing urban and peri-urban zones, the demand for low and medium rating diesel gensets is expected to remain robust. India is witnessing rapid urbanization, with approximately 34% of the population living in urban areas in 2021. By 2031, this is expected to rise to 40-45%, leading to more construction and real estate projects, directly driving genset demand for temporary and backup power solutions.

Expansion of Small and Medium Enterprises (SMEs)

India's dynamic Small and Medium Enterprises (SMEs) sector is a major contributor to the demand for low and medium rating diesel gensets. SMEs form the backbone of the Indian economy, accounting for a substantial share of employment and industrial output. These enterprises are often spread across both urban and rural locations, many of which suffer from unreliable electricity supply, making gensets a critical investment.

SMEs in manufacturing, packaging, food processing, textiles, and printing rely on steady power to maintain productivity. Even brief interruptions can result in equipment damage, production loss, or failure to meet client deadlines. Low and medium capacity gensets, typically between 30 kVA to 200 kVA, are ideal for these operations due to their efficiency, ease of maintenance, and cost-effectiveness.

Many SME units operate from industrial estates, commercial complexes, or standalone facilities that may not have access to backup power infrastructure. In such settings, diesel gensets provide the necessary assurance of uninterrupted operations. Their compact size and flexibility allow SMEs to tailor power solutions to specific needs without incurring the high capital costs of large generator systems. Moreover, government initiatives like “Make in India” and “Startup India” have encouraged the growth of small industries across Tier 2 and Tier 3 cities. These programs have led to a surge in new industrial clusters that often lack stable power infrastructure during their early development phases. Until grid reliability improves, diesel gensets serve as the default power backup.

Another factor is the digitalization of businesses. With SMEs increasingly relying on computers, internet connectivity, and automated systems, uninterrupted power has become crucial. Diesel gensets ensure business continuity during grid failures, preserving data integrity and avoiding workflow disruptions.

As the SME sector continues to expand and modernize, the reliance on dependable power sources like low and medium rating diesel gensets is expected to grow, sustaining market demand in this segment. SMEs contribute nearly 30% to India’s Gross Domestic Product (GDP), underscoring their importance in the economy. This growing sector's energy demands are increasingly met by low and medium rating diesel gensets, which provide reliable backup power during grid disruptions.

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Key Market Challenges

Rising Environmental Regulations and Emission Norms

One of the most pressing challenges facing the Low and Medium Rating Diesel Genset market in India is the tightening of environmental regulations and emission norms. With growing concerns about air pollution and climate change, both central and state governments are implementing stricter policies to control diesel emissions. Diesel gensets, especially older and low-capacity models, are significant contributors to localized air pollution due to the release of particulate matter, nitrogen oxides (NOx), and carbon dioxide (CO₂).

The Central Pollution Control Board (CPCB) has introduced phased emission standards for gensets, with CPCB IV+ norms being among the most recent updates. These norms mandate the use of cleaner technologies, such as advanced fuel injection systems, exhaust treatment methods like selective catalytic reduction (SCR), and diesel particulate filters (DPF). While these innovations are beneficial for the environment, they also significantly increase the cost of gensets and maintenance.

Small and medium users, such as SMEs, educational institutions, and residential societies, often find it difficult to afford the higher upfront costs associated with cleaner gensets. This financial burden can slow down the replacement of older, more polluting models, thereby putting manufacturers in a difficult position—balancing regulatory compliance with market affordability. In addition, regulatory uncertainty and delays in enforcing new norms can create confusion in the market. Manufacturers are sometimes left in limbo, unsure whether to invest in the development of upgraded models or wait for clearer enforcement timelines. End users, too, may postpone purchases, affecting market momentum. Furthermore, urban authorities in cities like Delhi, Mumbai, and Bengaluru have started restricting the use of diesel gensets during periods of high pollution, pushing for cleaner alternatives like gas gensets or battery storage systems. These regional restrictions reduce the operational scope for diesel gensets, directly impacting sales.

To remain viable in this changing landscape, genset manufacturers must invest in R&D to develop eco-friendly, cost-effective solutions, while users need support from government incentives or subsidies to make the transition. Until such balance is achieved, environmental regulation will continue to pose a challenge to market growth.

Growing Competition from Renewable and Alternate Power Solutions

Another key challenge for the Low and Medium Rating Diesel Genset market in India is the increasing competition from renewable and alternative power sources. Solar photovoltaic (PV) systems, battery energy storage, and natural gas gensets are emerging as cleaner, more sustainable options, especially as the government aggressively promotes green energy adoption.

In recent years, the cost of solar power systems has dropped significantly, making them a more attractive long-term investment for both residential and commercial users. Solar panels, when combined with energy storage systems, can provide reliable backup power with minimal operational costs, unlike diesel gensets that require regular refueling and maintenance. With net metering policies and subsidies offered by several state governments, the adoption of rooftop solar systems has gained momentum, especially among urban users.

Battery storage technology is also evolving, with advancements in lithium-ion systems offering longer life, faster charging, and reduced maintenance. These systems are particularly appealing in sectors like IT, banking, and education, where power requirements are stable and noise or emissions are a concern. Additionally, natural gas gensets are being promoted as a cleaner alternative to diesel-based units. They emit significantly lower pollutants and can be integrated into piped gas networks in urban areas, making them a viable choice for commercial and institutional users. While the upfront cost may be higher than diesel gensets, the operational benefits and environmental compliance make them increasingly competitive.

The shift toward sustainable power solutions is further encouraged by corporate sustainability goals and environmental responsibility. Large enterprises and institutions are moving away from diesel gensets to meet ESG (Environmental, Social, and Governance) standards and reduce their carbon footprint. This trend, though still in its early stages for low and medium power users, poses a long-term threat to diesel genset demand. Moreover, innovations in inverter-based systems, hybrid solutions, and grid-tied backup setups are expanding user choices beyond traditional diesel options. As these alternatives become more affordable and reliable, the market share for diesel gensets, particularly in the low and medium segments, may face steady erosion.

To remain relevant, diesel genset manufacturers must innovate, explore hybrid solutions, or diversify into alternate energy offerings. Without strategic adaptation, the traditional diesel genset market risks stagnation in a rapidly transforming energy landscape.

Key Market Trends

Shift Toward Hybrid Power Solutions

A significant trend emerging in the India Low & Medium Rating Diesel Genset market is the increasing shift toward hybrid power solutions. As energy reliability and environmental sustainability become critical considerations for both commercial and residential users, many are opting for systems that combine diesel gensets with renewable energy sources like solar, wind, or battery storage.

Hybrid setups are particularly popular in sectors such as telecommunications, remote infrastructure, educational institutions, and healthcare facilities, where uninterrupted power is essential. By integrating solar photovoltaic (PV) panels or battery banks with diesel gensets, users can reduce fuel consumption, lower emissions, and extend the lifespan of the genset by using it only when necessary.

The falling cost of solar modules and batteries has made hybrid systems more accessible and economically viable. This is especially relevant in remote or off-grid regions where diesel supply logistics are challenging or expensive. In such areas, hybrid solutions ensure consistent power while minimizing dependency on fuel.

Manufacturers are responding to this trend by developing gensets equipped with smart controllers, allowing seamless switching between energy sources based on load demand and energy availability. These intelligent systems can optimize operations, reduce wear and tear on the diesel engine, and cut down operational costs over time.

The trend reflects a broader transition in India’s energy ecosystem, where decentralized, clean, and intelligent power systems are increasingly preferred. As environmental regulations tighten and user awareness grows, hybrid gensets are expected to gain further traction, especially in low and medium power applications where cost savings and operational efficiency are crucial.

Rising Demand from Data Centers and IT Infrastructure

India’s booming digital economy has led to a rapid rise in demand for data centers and IT infrastructure, which in turn is fueling the market for low and medium rating diesel gensets. With data consumption, cloud services, and digital transactions growing at unprecedented rates, data centers require highly reliable power backup systems to maintain uptime and safeguard sensitive operations.

While large hyperscale data centers typically use high-capacity gensets, smaller edge data centers, telecom exchanges, and IT offices across Tier 1, 2, and 3 cities often rely on low to medium rating gensets ranging from 50 kVA to 500 kVA. These gensets ensure continuous power for servers, networking equipment, air conditioning systems, and communication hardware.

In a sector where even a few seconds of downtime can result in financial loss or data corruption, diesel gensets are viewed as a critical layer of backup, supplementing battery-based UPS systems. This layered approach ensures that power continuity is maintained even in prolonged outages or voltage fluctuations.

The trend is further amplified by government programs like Digital India and increased penetration of internet services into rural and semi-urban areas. As data networks expand, the infrastructure supporting them—telecom towers, local server rooms, and regional data hubs—will continue to rely on gensets as a dependable power source.

Manufacturers are also tailoring gensets to meet the specific needs of the IT sector, such as low noise, fuel efficiency, remote monitoring capabilities, and space optimization. This alignment between product development and market demand is strengthening the role of diesel gensets in supporting India’s growing digital backbone.

Segmental Insights

Rating Insights

The Low Rating held the largest market share in 2025.  Low Rating diesel gensets dominated the India Low & Medium Rating Diesel Genset market due to their wide applicability, cost-effectiveness, and alignment with the country’s energy reliability challenges. Typically ranging up to 100 kVA, these gensets are well-suited for small-scale power backup needs across residential, commercial, and institutional segments, particularly in regions where grid power is inconsistent or unavailable.

One of the primary reasons for this dominance is the prevalence of power outages and voltage instability in rural and semi-urban areas. In these regions, low rating gensets serve as a practical and affordable solution for essential power needs in homes, small shops, clinics, and educational facilities. Their compact size, ease of installation, and minimal maintenance requirements make them an ideal choice for individual users and small businesses that cannot afford larger units or complex setups.

Low rating gensets are heavily used in mobile and temporary applications such as construction sites, outdoor events, and emergency relief operations. Their portability allows users to transport and deploy them quickly, ensuring uninterrupted power supply wherever needed. Affordability plays a major role in their dominance. Compared to medium rating gensets, low rating units involve lower capital and operational costs, which is crucial for cost-sensitive sectors like small and medium enterprises (SMEs). These businesses often rely on gensets for backup during frequent outages to maintain productivity and avoid operational losses.

Additionally, the rise of rental and leasing models has made low rating gensets more accessible to a wider audience. They are frequently chosen for short-term or seasonal needs due to their lower rental rates and availability.

kVA Rating Insights

The 5 kVA – 50 kVA held the largest market share in 2025.  The 5 kVA – 50 kVA segment dominated the India Low & Medium Rating Diesel Genset market primarily due to its versatility, affordability, and suitability for a wide range of end-users. This power range is ideal for meeting the backup energy needs of small businesses, residential complexes, retail shops, clinics, telecom towers, and educational institutions. These sectors often experience intermittent power supply and require reliable yet cost-effective solutions to ensure operational continuity.

One of the main reasons for the dominance of this segment is India's uneven power distribution and frequent outages in Tier 2, Tier 3 cities, and rural areas. In these regions, smaller gensets are commonly used as the primary backup due to limited access to reliable grid electricity. Additionally, these gensets are compact, easy to install, and require relatively lower maintenance, making them highly attractive to users with constrained space or limited technical expertise.

From a cost perspective, gensets in the 5 kVA – 50 kVA range are more affordable compared to higher capacity models, allowing wider adoption among micro, small, and medium enterprises (MSMEs). These businesses are highly sensitive to cost and prefer solutions that deliver essential backup power without large capital investments. Moreover, the growing demand from the telecom sector for powering remote tower sites, which typically require low-kVA gensets for continuous uptime, further supports this segment. Also, many residential users and housing societies use gensets in this range for backup during peak demand or grid failure.

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Regional Insights

South India held the largest market share in 2025. South India dominated the India Low & Medium Rating Diesel Genset market due to a combination of geographical, economic, and industrial factors that create a robust demand for these power solutions. The region includes key states like Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, and Telangana, which have seen substantial economic growth and infrastructural development in recent years.

South India has experienced significant industrialization, with a thriving presence of sectors like manufacturing, textiles, IT, and automotive industries. Cities like Chennai, Bengaluru, and Hyderabad are prominent industrial hubs, where continuous power supply is essential for operations. In particular, medium rating gensets (100–500 kVA) are crucial in maintaining power in manufacturing plants, IT parks, and educational institutions, where interruptions can lead to operational delays and financial losses.

Despite the region's economic progress, power supply in some areas—especially in rural and semi-urban zones—remains unreliable. Power outages, voltage fluctuations, and grid failures are still common in many parts of South India. Diesel gensets offer a quick and efficient solution to ensure uninterrupted power during such disruptions. Small to medium-sized enterprises (SMEs) and households in these regions turn to low-rating gensets (up to 100 kVA) as their preferred source of backup power.

Agriculture plays a significant role in South India, where many remote rural areas still rely on diesel gensets for irrigation, farming activities, and small rural industries. Low-rating gensets provide critical backup power for water pumps, processing units, and other agricultural needs, making them highly demanded in these areas.

South Indian states have also been the focus of various infrastructure development projects, supported by both state and central governments. These include the development of smart cities, industrial corridors, and public services, which further drive the demand for reliable power backup, particularly in new and emerging sectors.

Recent Developments

• In October 2024, Baudouin has unveiled its latest generator sets designed specifically for data centers. These new gensets are engineered to provide reliable and efficient backup power solutions, ensuring uninterrupted operations in critical environments. Featuring advanced technology and enhanced fuel efficiency, Baudouin's generator sets offer a robust response to the increasing energy demands of data centers. The launch underscores the company's commitment to delivering high-performance power solutions tailored to meet the specific needs of this fast-growing sector.
• In October 2024, Power Engineering India Pvt Ltd has introduced its latest innovation—Glass Reinforced Polymer (GRP) diesel generators—at a global launch event. These cutting-edge generators combine durability with advanced technology, offering enhanced performance and efficiency. The GRP construction ensures superior strength, corrosion resistance, and lightweight design, making them ideal for various industrial applications. This new product reinforces Power Engineering India's commitment to innovation, providing reliable and sustainable power solutions to meet the evolving needs of global markets.

Key Market Players

• Cummins India Limited
• Kirloskar Electric Company Ltd.
• Mahindra Powerol Ltd.
• Kohler Power India Ltd.
• Ashok Leyland Ltd.
• Luminous Power Technologies Pvt. Ltd.
• Perkins Engines Company Limited (India)
• Honda Siel Power Products Ltd.

Report Scope:

In this report, the India Low & Medium Rating Diesel Genset Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• India Low & Medium Rating Diesel Genset Market, By Rating:

o   Low Rating

o   Medium Rating

• India Low & Medium Rating Diesel Genset Market, By kVA Rating:

o   5kVa – 50 kVa

o   50.1 kVa – 100 kVa

o   100.1 kVa – 162.5 kVa

• India Low & Medium Rating Diesel Genset Market, By End User:

o   Residential

o   Commercial

o   Industrial

• India Low & Medium Rating Diesel Genset Market, By Region:

o   South India

o   North India

o   West India

o   East India

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India Low & Medium Rating Diesel Genset Market.

Available Customizations:

India Low & Medium Rating Diesel Genset 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).

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