Indian AC makers want a piece of Europe's heatwave boom but exports unlikely before 2027

Europe’s intensifying heatwaves are beginning to reshape the air-conditioning market, and Indian manufacturers are watching closely. As cooling demand rises across the continent, several companies are assessing whether Europe could emerge as a major export destination.

The interest is being driven by a sharp increase in demand. Sales and customer enquiries for cooling products have reportedly climbed two to three times in parts of Europe, where extreme heat is becoming more frequent, according to a report by the Times of India.

The World Health Organisation has warned that heatwaves, once viewed as rare events, are increasingly becoming a regular feature of European summers.

WHO Director-General Tedros Adhanom Ghebreyesus said more than 1,300 excess deaths had been recorded since June 21 because of extreme temperatures. He described Europe as “the fastest-warming continent on Earth,” with temperatures increasing at twice the global average. Nearly 150 million people across the continent are currently exposed to extreme heat conditions, according to the WHO.

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Government sees export potential

The Indian government has identified air-conditioner manufacturing as a high-value opportunity, drawing comparisons with the country’s push into smartphone production.

Commerce and Industry Minister Piyush Goyal and Electronics and Information Technology Minister Ashwini Vaishnaw have urged manufacturers to increase exports, according to a Times of India report.

Air conditioners are also the only white-goods category covered under India’s production-linked incentive scheme, giving the government an added reason to encourage the industry to build export capacity.

India’s domestic AC penetration remains relatively low at around 10-11%, which has so far limited the industry’s focus on overseas markets.

Exports unlikely before 2027

Despite the growing interest, large-scale commercial exports to Europe are unlikely to begin immediately.

Industry executives expect companies to need more time to meet Europe’s certification, energy-efficiency and product-quality requirements. Commercial shipments are therefore not expected to begin before 2027.

“While we had been studying opportunities in Europe since last year, this year's heatwaves have opened our eyes,” Kamal Nandi, Head of the Appliances Business at Godrej Enterprises Group, told TOI. “Immediate sales are not possible because of stringent certification requirements, but we definitely plan to launch by next summer.”

Products need to be redesigned

Entering Europe will require more than securing approvals. Indian manufacturers will also have to adapt their products to local conditions.

Godrej’s assessment suggests that heat-pump air conditioners, which provide both cooling and heating, account for nearly 80% of residential AC sales in Europe, the TOI report said.

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Similar products are already sold in parts of India, including Jammu and Kashmir and Delhi-NCR. However, manufacturers say European homes will require different designs and installation solutions, particularly because fitting costs are much higher.

A large number of European buildings were not constructed for conventional air-conditioning systems. Heritage-building rules in several cities also restrict the installation of external split-AC units.

Before entering the market, manufacturers must comply with CE certification, energy-labelling requirements and eco-design regulations.

“It's not that easy,” said Jasbir Singh, Chief Executive Officer of Amber Enterprises. “First, we have to get the product ready for those countries and clear their energy-efficiency norms.”

Chinese brands hold the edge

Indian companies will also enter a market already dominated by Chinese, South Korean and Japanese manufacturers.

Brands such as Midea, Gree and Haier have a strong presence in Europe, alongside established companies including Daikin and LG. Chinese and South Korean manufacturers are estimated to enjoy a cost advantage of around 15-18% over Indian producers.