India Air Conditioners Market, By Region, Competition, Forecast and Opportunities, 2021-2031F

The India Air Conditioners Market was valued at USD 5.85 Billion in 2025, and is expected to reach USD 15.41 Billion by 2031, rising at a CAGR of 17.57%. Due to the increasing strength of the household sector, the expansion of new housing developments, and the growth of SMEs, residential air conditioners are dominating the AC market share 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 in the residential sector, which represents 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 usage is projected to lead to India's total electricity demand from home air conditioners exceeding the current total electricity consumption of Africa, underscoring the evolving trends in energy consumption patterns.

Key Market Drivers

Rising Household Sector and Urbanization

One of the primary drivers of the Indian AC market is the increasing strength of the household sector coupled with rapid urbanization. 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. Urbanization not only leads to higher demand for housing but also results in increased disposable incomes 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 experiencing significant development, witness a substantial rise in AC installations both in new constructions 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 the context of India's climate, where summers can be harsh with high temperatures and humidity, air conditioning becomes almost essential for ensuring 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 urbanization in India serve as significant drivers for the AC market by 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.

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 can fluctuate, consumers are cautious about the ongoing expenses associated with running AC units, impacting 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.

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 can fluctuate, consumers are cautious about the ongoing expenses associated with running AC units, impacting 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.

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

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:

• Splits
• Windows
• VRF
• HVAC Chillers
• Others

India Air Conditioners Market, By End Use:

• Residential
• Commercial Industrial

India Air Conditioners Market, By Distribution Channel:

• Multi-Branded Stores
• Supermarkets & Hypermarkets
• Exclusive Stores
• Online
• Others

India Air Conditioners Market, By Region:

• North
• South
• East
• West

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India Air Conditioners Market.

Available Customizations:

With the given market data, the publisher 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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