Thermal conditions in India are changing and are beginning to impact the design and operation of buildings. In 2024, the country recorded 536 days of heat wave, one of the hottest summers in the last ten years. The thermal load on the built environment is increasing due to longer-lasting heatwaves, increasing extreme temperatures and the urban heat island effect. Urban temperatures in most cities are currently 3 °C to 7 °C higher than surrounding areas, and summer temperatures have already exceeded 45 °C.
These conditions are changing expectations from climate control systems. The need has shifted to integrated indoor environmental control: thermal comfort, mechanical ventilation, air quality and energy efficiency are collectively considered as an operating system of the building, not a set of independent functions.
India is entering a phase of accelerated cooling demand. The Indian heating, ventilation and air conditioning (HVAC) market was estimated to be worth $11.67 billion by 2024, but is expected to reach $45.42 billion by 2033. India’s Cooling Action Plan projects an 11-fold increase in space cooling during the period between 2018 and 2038. Furthermore, India is projected to become the largest space cooling consumer in the world by 2050. IEA. Residential air conditioner penetration is less than 10% of total households, meaning there is an untapped opportunity.
This growth is being fueled by urbanisation, rising incomes and rapid construction of commercial infrastructure. For example, data centers are projected to grow at a compound annual rate of growth of more than 20%, which will generate long-term demand for precision cooling systems. Development is also becoming widespread geographically. Demand is no longer concentrated only in metro cities. More than 40% of AC demand now originates in tier 2, 3 and 4 cities, where rising incomes, improving electrification and expanding commercial infrastructure are creating the first generation cooling market. This geographical spread changes the responsibilities of the industry. Building excellent HVAC systems is not enough for premium projects. The standard of engineering, installation and service that defines those projects needs to be expanded onto a much broader canvas.
There is a range of applications in which HVAC failure isn’t an inconvenience, it’s a disruption to something important. India’s data center capacity is projected to reach 1,263 MW in 2025, more than three times the 2020 level, and reach 3 to 5 GW by 2030. Cooling accounts for 38 to 40% of total electricity consumption in these facilities. In pharmaceutical manufacturing, temperature excursions lead to regulatory consequences. In the hospital critical care environment, airflow design is a clinical decision.
Sectors that understand this have already given primary infrastructure status to HVAC; Specifying with the same rigor they apply to power supplies, demanding redundancy, performance guarantees and long-term service accountability. In each of these environments, HVAC systems serve as the operational infrastructure. Performance is measured not only in efficiency, but also in stability, accuracy and reliability over long operating cycles.
The share of cooling in India’s total electricity demand is already around 40%, this figure will increase substantially with the realization of the projections of the Cooling Action Plan. Inverter-driven compressor technology, variable refrigerant flow systems and high-efficiency chiller platforms are driving real reductions in energy intensity, while the Bureau of Energy Efficiency’s progressive standards, upgraded approximately every two years, provide the structural framework within which improvements compound. The transition to refrigerants that reduce global warming potential, in line with India’s obligations under the Kigali Amendment, addresses the environmental footprint of the refrigeration cycle itself. Efficiency and sustainability are no longer separate conversations in this industry; They are one and the same.
India presents one of the more demanding operating environments for HVAC systems. System performance is affected by ambient temperatures which can reach 48 °C, high concentrations of airborne particles, high humidity variability and uneven grid conditions.
These have resulted in more focused engineering. The system is currently being developed to be efficient at high ambient temperatures, be useful over extended periods, and be able to handle heavy particulate air without affecting performance. Components such as compressors, heat exchangers and filtration systems are being modified according to these realities.
This is also being supported by the development of domestic manufacturing. Advanced localization is allowing devices to be tailored to operating conditions in India rather than being customized as per international requirements. This increases consistency of performance and long-term reliability.
The convergence of urban density and air quality is making ventilation a first-order design consideration. Concentrations of indoor pollutants can accumulate substantially without proper ventilation in tightly sealed buildings, especially in cities where outdoor air quality is already poor. Energy recovery ventilation is a direct solution to this, allowing higher fresh air exchange rates without the energy costs that direct outdoor air intake would otherwise impose. HEPA-grade filtration and photocatalytic purification systems are being integrated into air handling units as standard specification, not as premium additions.
For hospitals, schools, commercial complexes and transit infrastructure, healthy indoor air is increasingly being understood as a determinant of occupant performance and long-term property value. Buildings that get this right are not only more comfortable, they are more productive, better occupied and more competitive as an asset.
The data available from a well-equipped modern HVAC system, real-time readings on temperature, humidity, occupancy, CO2 concentration and equipment performance, creates the conditions for a fundamentally different quality of building management. AI-enabled platforms are turning that data into operational intelligence: predictive maintenance that identifies compressor drift or refrigerant pressure deviations before failure occurs, occupancy-responsive ventilation that adjusts fresh air delivery to actual building use, dynamic load optimization that reduces grid stress during peak demand.
The Smart Cities Mission in India, which envisages implementation of 7,188 projects across 100 cities by July 2024, has been a significant catalyst for the use of IoT-enabled HVAC. Intelligent building management is no longer a premium specification, but a market expectation, and the operational and energy performance it provides is making the business case attractive in every sector.
The efficiency of an HVAC system is not fixed at the point of installation; It is the result of decisions taken throughout its operating life. Responsible refrigerant recovery during servicing, installation quality, prescribed maintenance discipline: each of these variables determines whether the designed performance is realized in practice. An industry that is serious about its environmental commitments needs to be equally serious about what happens to the equipment after it leaves the factory.
The growing base of trained HVAC engineers and accredited service network in India is strengthening the industry’s ability to maintain performance at scale. The investments being made in technical skills and service infrastructure today will determine the real-world efficiency of the installed base that India is building, and that base will serve well into the 2040s.
India’s HVAC industry is indeed at an inflection point. The convergence of climate pressures, urban infrastructure growth, domestic manufacturing maturity, and AI-enabled systems is creating a more capable and more purposeful industry than at any previous point in its history. The systems being specified today will shape building performance, energy consumption and the quality of the indoor environment for decades.
The direction is clear with greater integration of efficiency, ventilation, digital intelligence and climate-resilient engineering, built specifically for India’s conditions and India’s scale. The industry that reaches that standard will not just meet India’s cooling demand. This will be part of how India manages one of the defining challenges of the coming decades.
(Views expressed are personal)
This article is written by Neeraj Gupta, Deputy Head, Living Environment Division, Mitsubishi Electric India.
