Redefining the surge of Indian HVAC Market

Kanwal Jeet Jawa points out that driven by variable components of the real estate sector like chillers, variable refrigerant flow (VRF) and air handling units (AHU) – the HVAC industry is expected to reach approximately five million Ton Refrigeration (TR) by 2015.


The Indian Heating, Ventilation and Air-Conditioning (HVAC) sector is one of the important constituents of the new-wave of country’s development. In a traditional social setup where air-conditioning was widely believed around two decades back as the signature of luxury, has today transformed into a fundamental cogwheel of sustenance.

A sector which has benefitted greatly by the positive economic policies, encouraging foreign investments and sectoral enthusiasm has helped the industry in capturing approximately 10% growth every year, where industry estimates have put the revenue of the industry at more than Rs. 14,000 crore achieved in the past fiscal year. This growth is estimated to consolidate and burgeon in the coming times where the industry expects a revenue return of Rs. 15,000 – Rs. 16,000 crores by the end of the FY of 2013-14.

Experts attribute this constant growth of the sector to varied rationale where prominent has been economy’s continual growth across varied sectors like Real Estate, Mechanical, Electrical & Plumbing, Hospitality, Health Services and Education sectors. This tertiary sector’s bloom has directly increased the scope and relevance of the HVAC sector which has helped in the cumulative growth of the sector which is valued at more than Rs. 50 billion in annual capitalization at current estimates.

The Indian economy’s continual growth has helped the HVAC industry reach out to the consumers across the country and benefit from the post-liberalization initiatives. Experts point that one of the major factors to this growth has been the Indian infrastructure sector whose 100% growth over the FY 12-16 period has been one of the biggest contributor to this bloom. Industry analysts concur that with a considerable market share in the Indian infrastructure sector, the Indian HVAC sector relevance will keep on increasing in other constituent sectors like MEP where it will retain its 15% market share in the upcoming financial year as well.

Driven by variable components of the real estate sector like Chillers, Variable Refrigerant Flow (VRF) and Air Handling Units (AHU), the HVAC industry is expected to reach approximately five million TR by 2015 and thus consolidate its surge which will be buoyed by the emergence of various sectors like Real Estate & Infrastructure, Heavy Industries, Hospitality and Power. With growth drivers being the important cog-wheels, constituents like influx of newer technologies, greater awareness of consumers of air-conditioners as a utility device, greater investment in the realty sector, streamlining of competition and consumer thrust towards energy efficient norms, are positively affecting the growth of the sector.

Apart from the above mentioned pointers which generically point towards the factors of growth, one may also look at other growth drivers which are playing a bigger role in the evolution of this sector. With a phenomenal growth rate, the Indian HVAC sector has created a concrete platform for continuing evolution. In here the role of governmental policies are also important to mention, wherein a positive support structure by the administration has helped greater investments into the sector, which has opened doors for a greater surge forward. Governmental policies on efficient use of products, refrigerant use, safety pre-requisites, stricter eco-friendly norms, services & technical usage have aided the players in the market to grow further.

Solidifying the course of the sector has been varied market trends following which the Indian HVAC sector has been able to move forward. Some of the trends are enumerated as under:
• Increased demand for HVAC units with smaller capacities
• Enhanced likeness towards greener buildings
• Preference towards hi-wall segment as compared to wall & window air conditioners
• Greater awareness towards star labelling and growth in sales of star-rated products
• Demand of sustainable design construction standards which incorporate greener technologies
• Greater interest of consumers in energy-efficient products like variable refrigerant flow (VRF) systems and inverter based air-conditioning solutions
• Likeness towards non-ozone depleting refrigerants

These factors have been possible due to the oncoming of enhanced technological innovations in the industry which has forwarded the cause of the sector to a greater extent. Experts agree that these technological innovations will regulate the augmentation of the future, and will help in the robust growth of the market. Constant technical innovations in the HVAC market and upgraded technologies have encouraged organizations to provide cutting-edge innovations to the consumers, which augers well for the industry for the future.

Important to quote herein are other significant forwards like usage of energy efficient Hydro fluorocarbon 32 (HFC32) refrigerants which going forward will replace R410A in terms of performance. This significant move has helped bring greater tech innovations into the market, and revived industry interest. Experts concur that HFC32 being a low carbon-dioxide emitting refrigerant, will bring in a greater acceptance for greener solutions which will make the corporates tag into the greater benefits of HVAC systems.

Also noteworthy to look herein are technical innovations by market leaders like Super Multi Hot Water Air-conditioning solution which utilizes disposed energy to heat water, oncoming of Variable Refrigerant Volume (VRV) technologies which is used for large sized buildings and other upcoming innovations like ‘Room Precise Temperature Control’ wherein the revolutionary electronic expansion valve continuously adjusts the refrigerant volume in response to load variations in indoor units, along with inverter driven condenser fan motor; which brings to the market engaged technical solutions which lets consumers to have more informed choices in front of them.

These aforementioned technological trends have helped in the greater surge of HVAC solutions, which are paving the way forward for this industry. Now that the entire player eco-system is embracing innovative technologies, HVAC systems have finally been able to shrug of the luxury item tag and are becoming more of a home essential product.

With cutting-edge technological innovations like energy efficiency measures like BEE Star Labelling being made mandatory, oncoming of greener refrigerants like HFC32, strategic phase-out of R410A refrigerant and industry engagement of latest technologies like VRV signalling a resurgent thrust into the market, this development augments consumer interest and likeness which will help boost the fortunes of the industry. It is now solely resting upon a pertinent government-corporate affiliation which can sustain this growth and create an evolved ecosystem for the sector; one which will take the Indian HVAC sector into the top markets of the world.

(The author is Managing Director & Chief Operating Officer, Daikin Airconditioning India Pvt. Ltd.)

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