India Chillers Market Size & Share Analysis - Growth Trends & Forecasts

India Chillers Market Trends and Insights

Rapid expansion of data-center capacity

AI-driven racks consume 35-70 kW versus 5-6 kW for traditional IT loads, prompting operators to specify liquid immersion and adiabatic chillers for improved PUE. Power demand from data centers rose 4.4% year-on-year to 139 billion kWh in June 2023, and policies such as Rajasthan’s 2025 Data Center Policy are funnelling INR 20,000 crore of fresh investment. Orders for data-center cooling doubled Johnson Controls’ 2024 sales backlog, underscoring the segment’s pull on the India chillers market.^{[1]Johnson Controls, “2024 Annual Report & Proxy Statement,” investors.johnsoncontrols.com}

Government energy-efficiency incentives and PAT scheme

The PAT program has saved 113.16 billion kWh, equating to INR 89,122 crore, and chillers have moved from voluntary to mandatory star labelling from January 2024. BEE now targets parity with global efficiency norms by 2027, and its financing platform has attracted over 310 investment proposals, a pipeline that boosts premium-grade chiller uptake.

Replacement demand from R-22 phase-out

India’s pledge to phase out HCFCs by 2030 is accelerating swaps of legacy R-22 equipment. Domestic producers are scaling HFO 1234yf and 1233zd output, while BIS safety codes ease natural-refrigerant adoption. The India Cooling Action Plan predicts a 25-30% refrigerant-demand cut versus business-as-usual, creating a retrofit boom for the India chillers market 

Growth of district-cooling projects in tier-2 cities

GIFT City’s plant has proven 40% energy-bill savings, spurring similar schemes in Kochi and Indore. Smart-Cities investments topping INR 171,044 crore furnish trunk infrastructure, while BEE guidelines now frame performance baselines for developers, all expanding the India chillers market footprint.^{[2]Ministry of Housing and Urban Affairs, “Smart Cities Mission,” smartcities.gov.in}

High upfront capital cost

Each uplift in star rating needs about INR 600 crore of re-tooling, and SME buyers struggle to unlock mid-ticket finance despite long-run energy savings. Data-center build costs ballooned 15% in 2024, and HVACR M&A multiples hit 16.5× EV/EBITDA, signalling a capital-intensive cycle that could dampen near-term orders for the India chillers market.^{[3]Economic Times, “Don't just be cool, be better: BEE asks AC, fridge manufacturers to boost energy efficiency to match world standards,” m.economictimes.com}

Grid instability and power-quality issues

Peak demand is set to touch 270 GW in June 2025, causing voltage swings that impair magnetic-bearing compressors, particularly outside tier-1 cities. Renewable-energy banking restrictions compound the challenge for data-center operators who need round-the-clock high-quality power, restraining premium-chiller penetration.^{[4]Mercom India, “Power-Hungry Data Centers Drive Demand for Renewable Energy,” mercomindia.com}

Segment Analysis

By Type of Cooling: Water-cooled systems drive efficiency gains

Water-cooled chillers held 52.40% of 2024 revenue, underscoring their indispensability for large industrial loads and hyperscale server halls. Air-cooled models, while less efficient, are clocking a 9.50% CAGR through 2030 as drought-prone regions and smaller commercial sites prize low water use and easier installation. Hybrid evaporative designs are emerging for dry climates, while coastal hubs continue to specify condenser-water loops for peak COP levels.

IoT overlays such as Voltas-TCS remote monitoring trim downtime and cut service costs, making both cooling types more attractive to operators working within the India chillers market. Free-cooling add-ons in northern states exploit cooler winters to slash compressor runtime, and evaporative modules are mitigating the high ambient temperatures typical of western corridors.

Note: Segment shares of all individual segments available upon report purchase

By Compressor Type: Screw units dominate, magnetic bearings accelerate

Screw compressors captured 37.60% revenue in 2024 thanks to their robust part-load performance across manufacturing and commercial sites. Magnetic-bearing centrifugal machines, free of oil and high in efficiency, are growing at 11.20% CAGR as data-center and pharma clients chase low TCO and tight environmental metrics. Kirloskar’s domestic launch positions India among the few geographies with local supply, bolstering self-reliance for this advanced segment.

Hitachi’s VM series posts COPs up to 7.0 and IPLV 9.5, illustrating why specifiers are rewriting tenders to favor magnetic bearings. Scroll compressors persist in low-capacity office parks, whereas niche reciprocating units endure in specialty chemical loops. The dearth of certified technicians, however, could curb rapid migration and temper near-term gains for the India chillers market.

By Refrigerant Type: HFC incumbency meets low-GWP surge

R-134a retained a 40.70% foothold in 2024, but Kigali targets are catapulting HFO blends to a 12.40% CAGR. Domestic investments by Navin Fluorine are buffering against import shocks, while Daikin’s R-32 advocacy shows OEMs hedging across multiple low-GWP pathways. Natural refrigerants—ammonia and CO₂—are inching into cold-chain niches, though safety code compliance and capex premiums still narrow their addressable slice.

HFC price volatility is triggering stockpiles and supplier diversification as manufacturers shelter margins. Meanwhile, BIS safety updates de-risk natural-refrigerant adoption in pharma and food plants, expanding options for the India chillers market without compromising on global warming targets.

By Capacity: Mid-range systems anchor commercial demand

Units rated 350TR to 700 TR accounted for 32.10% sales in 2024, balancing efficiency with footprint in malls, hospitals and multi-tenant office campuses. Sub-100 TR modules are scaling fastest at 10.70% CAGR because distributed data-center pods and modular real-estate designs need flexible, incremental cooling. Large central-plant machines above 700 TR continue to serve petrochemical and district-cooling schemes.

Variable-speed drives and staged compressor arrays now come standard even in mid-range models, sharpening energy profiles. Cold-chain logistics-a USD 45.8 billion segment by 2028-requires finely stepped capacities and redundancy, further widening the capacity mix for the India chillers market.

Note: Segment shares of all individual segments available upon report purchase

By End-user Industry: Commercial buildings lead, data centers surge

Commercial real estate absorbed 29.30% demand in 2024, covering offices, hotels and shopping centers where occupant comfort is paramount. Yet data centers are sprinting ahead at a 13.10% CAGR, as AI workloads reshape thermal-management needs. Pharma, chemicals and petrochemicals uphold steady baseline demand, particularly where process-cooling precision dictates product quality.

Retail mall dwell times rising 30% have sparked upgrades to higher-capacity HVAC, and food-processing plants gearing toward USD 535 billion value by 2026 require tight thermal control along the production chain. These trends diversify the India chillers market beyond traditional big-box applications.

Geography Analysis

West India retains the pole position with 27.40% of 2024 spending due to heavy industry, pharma and emergent data-center clusters around Mumbai. Water stress is encouraging end users to substitute air-cooled packages, while Gujarat’s 9-12% annual chemical growth sustains orders for process-grade water-cooled chillers that deliver stable outlet temperatures even at 48 °C ambient. The India chillers market size for the region continues to benefit from repeat retrofit cycles as plants chase PAT targets.

South India, forecast to clock a 9.70% CAGR to 2030, thrives on Bengaluru-Hyderabad-Chennai’s hyperscale data-center corridor and Tamil Nadu’s expanding EV supply chain. The India chillers market size for this zone is being propelled by renewable-energy integration, which helps operators balance PUE goals with grid-carbon mandates. Daikin’s Sri City plant gives OEMs local capacity to customize units for hot-humid coastal climates.

North India’s Continental belt features NCR commercial towers, Jaipur’s hospitality boom and Punjab’s agro-processing cold-store rollout, sustaining steady procurement of mid-range systems. East and Central India, though smaller today, are using Smart-Cities capex to embed district-cooling ready infrastructure, positioning them as future growth pivots of the India chillers market