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The Heating, Ventilation and Air Conditioning (HVAC) market is evolving in India with the growing needs of comfort, efficiency and quality indoor air. With the changing weather pattern across the country, there are varied requirements of air conditioning throughout the year. Apart from the building infrastructure segment, the airports, metro and industrial infrastructure segments are also emerging as demand drivers for HVAC systems.

The Indian HVAC market is on growth path after the construction and infrastructure sector bouncing back with more new projects coming up. According to a Technavio report, the HVAC market in India will grow by US$ 2.26 billion from 2020 to 2024, progressing at a CAGR of almost 10% during the forecast period.

Demand trends

The increasing disposable income will act as the key driver for the growth of the Indian HVAC market from $8,526.7 million in 2019 to $31,598.6 million by 2030, at a high 16.0% CAGR during the forecast period (2020-2030). These appliances are witnessing rising sales with people purchasing them to maintain the optimum temperature inside closed spaces and achieve proper ventilation. From homes and large shops to offices, transport hubs, and factories, HVAC appliances find widespread usage.

While buildings market (commercial, residential and industrial) drives the demand largely, more demand is evolving from transportation sector with more metro rail networks are opening operations in the country. Also development of more airports will also see greater demand for HVAC units.  

Rapid urbanization along with relaxation in real estate regulations are boosting residential construction activities in India. Moreover, the ongoing construction of 100 smart cities will further drive the demand for HVAC systems.

Among commercial, industrial, and residential end users, commercial users account for the highest procurement rate of HVAC appliances in the nation. The growth in the number of corporate houses and shopping malls in the recent years has created a huge demand for ACs and heating and ventilation systems.

“HVAC demand is primarily driven by the advent of technologically advanced products, which are energy-efficient and can be remotely accessed. The use of natural refrigerants, such as CO2 coupled with increasing efforts by governments across the globe to promote energy-efficient products is expected to drive the market,” says Naohiko Hosokawa, Director & Business Unit Head - Living Environment Division, Mitsubishi Electric India.

Emerging technologies

The Indian HVAC market is divided into ventilation, cooling, and heating, on the basis of equipment type. Among these, the cooling category held the largest share. Most of the country has a tropical or subtropical climate, which means hot weather for much of the year. Day temperatures of 45 degrees Celsius are common in sub-Himalayan India during summers, while high humidity characterizes the period between July and September.

Technology is changing in HVAC system also to address the complexities of extreme weather conditions. Use of sensors and software systems has made HVAC systems smart enough to handle the challenging conditions. Technology is at the forefront of many HVAC trends because it's accessible and a lot smarter.

Ductless HVAC units are also the perfect solution for modern infrastructures dealing with holes and gaps in ductwork that cause air leaks. Rather than paying for pricey replacements, they can opt to go with ductless HVAC systems.

75F has introduced the intelligent control technology for HVAC systems. Gaurav Burman, VP & APAC President, 75F, India, explains, “The 75F Epidemic ModeTM is a new set of operations designed to keep 75F customers healthy and safe indoors. The Smart Purge application starts three hours before projected occupancy and runs for two hours, allowing for up to one hour of preconditioning before building occupants arrive for maximum comfort.”

Eco-friendly solutions

Green initiatives are big business today. There is an uptick in the trend for environmentally-friendly HVAC units, which includes the use of solar panels and wind turbines to reduce energy costs. The use of geothermal heating and cooling methods is also on the rise, which eliminates the need for conventional power. Some buildings incorporate a mix of gas and solar, allowing owners to switch between the two seamlessly to control power costs.

Market outlook

While there is an overall growth trend for HVAC market across the country, the India HVAC market is projected to witness the highest CAGR in the western part of the country. This is attributed to the presence of major manufacturing hubs, including Ahmedabad, Mumbai, Nagpur, and Pune, in the region. All these and many more tier-II cities in West India are home to the manufacturing plants of numerous automotive and pharmaceutical companies, which generate a high demand for HVAC equipment, both for providing a comfortable working environment and meeting the compliance requirements, according to report by Prescient & Strategic Intelligence.

Just like residential units, the construction of commercial and civic infrastructure is also driving the growth of the India HVAC market. New metro rail projects coming up across the country will scale up the requirements for HVAC solutions. Similarly, building airports under UDAN scheme and development of more terminals in the existing airports will add up to the requirement of HVAC systems.

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