Media365
Europe’s blistering heatwave is doing more than sending temperatures soaring above 40 degrees Celsius and straining power grids. It is also reshaping one of the world’s fastest-growing consumer markets — cooling appliances — and presenting Indian air-conditioner manufacturers with what could become their biggest export opportunity yet.
For decades, Europe remained a peripheral market for air conditioners. Mild summers, stricter energy regulations and buildings designed to retain heat meant demand was relatively limited compared with Asia or North America. But climate change is rapidly rewriting that equation.
As countries across southern and western Europe grapple with recurring heatwaves, consumers are buying air conditioners at an unprecedented pace. Global manufacturers including Samsung Electronics, LG Electronics, Midea and Mitsubishi Electric have reported a sharp jump in sales across key European markets such as France, Spain, Italy and Germany as demand for cooling equipment accelerates.
For India, which has spent the past few years building manufacturing capacity under the Production Linked Incentive (PLI) scheme and encouraging exports of high-value electronics, the shift could open a new avenue for export-led growth.
The opportunity, however, comes with a caveat: China and South Korea already dominate the European cooling market, enjoy significant cost advantages and possess well-established distribution networks. Indian manufacturers will have to compete not just on price, but also on technology, product localisation and regulatory compliance.
A market transformed by climate change
The latest heatwave sweeping across Europe has reinforced what climate scientists have warned for years: extreme heat is becoming the new normal.
According to the World Health Organization, Europe is the fastest-warming continent, with temperatures rising at more than twice the global average. Heatwaves that were once considered rare are becoming increasingly frequent, forcing governments, businesses and households to rethink how they cope with rising temperatures.
The result is a structural shift in consumer behaviour.
Unlike Asia, where air conditioning has long been considered an essential household appliance, only around one-fifth of European homes currently have air-conditioning systems. That leaves enormous room for future growth as rising temperatures make cooling less of a luxury and more of a necessity.
Manufacturers are already seeing the impact.
Samsung said sales of air conditioners in Italy, Spain and France recorded double-digit growth during the first half of the year. LG has been operating production lines at full capacity to meet global demand, while Chinese appliance giant Midea reported surging sales of its portable air conditioners, with some models selling out in European markets.
The surge has underlined an important reality for manufacturers worldwide: climate change is creating a long-term demand cycle rather than a temporary spike.
India senses an opening
Indian companies have been studying developed export markets for several years, but this year’s heatwave appears to have accelerated those plans.
Godrej Enterprises Group has said the recent weather extremes have strengthened its resolve to enter Europe, although commercial shipments are likely only after meeting stringent certification requirements.
Similarly, Havells is preparing to export air conditioners and fans to Europe through distributors after establishing a foothold in the United States.
Contract manufacturers such as Amber Enterprises, which produce appliances for global brands including LG, Samsung, Daikin and Blue Star, are also evaluating export opportunities as multinational companies expand manufacturing capacity in India.
Perhaps the clearest signal came from Voltas.
Speaking at the company’s annual general meeting, chairman Noel Tata said Voltas intends to utilise its existing manufacturing capacity to serve export markets, identifying Europe and West Asia as key growth regions. Rather than relying solely on contract manufacturing, the company wants to leverage its production facilities to build a stronger international business.
The timing aligns with New Delhi’s broader manufacturing ambitions.
The government has increasingly identified room air conditioners as a strategic export category under its manufacturing policy, viewing the sector as one capable of replicating the export success seen in smartphones and electronics.
Commerce and Industry Minister Piyush Goyal and Electronics and IT Minister Ashwini Vaishnaw have both encouraged manufacturers to scale up exports as India seeks to strengthen its position in global supply chains.
Why Europe is not an easy prize
Yet breaking into Europe will require far more than additional manufacturing capacity.
Industry executives estimate that Chinese and South Korean manufacturers currently enjoy a 15-18 per cent production cost advantage over Indian companies.
Chinese companies such as Midea, Gree and Haier already possess extensive supplier ecosystems, economies of scale and established dealer networks across Europe. South Korean players Samsung and LG have similarly built strong consumer brands over decades.
Beyond pricing, Europe presents unique technical challenges.
Nearly 80 per cent of residential cooling demand comes from heat-pump air conditioners capable of both heating and cooling. Although Indian manufacturers already produce similar technologies for parts of northern India, products must still be redesigned to comply with European housing standards.
Many European buildings, particularly heritage properties, restrict installation of conventional split air-conditioning systems. Installation itself can cost more than €1,000, making portable units and specialised designs increasingly attractive.
Manufacturers must also satisfy Europe’s rigorous regulatory framework, including CE certification, eco-design norms and stringent energy-efficiency requirements before products can enter the market.
Beyond exports, a manufacturing opportunity
Industry observers believe Europe’s changing climate could nevertheless create opportunities extending well beyond finished air conditioners.
Recurring heatwaves are expected to increase demand for energy-efficient cooling technologies, smart climate-control systems and specialised cooling products suitable for commercial spaces, hospitality and logistics infrastructure.
Jasraaj S. Kalra, Managing Director of Noble Group, said recurring European heatwaves are likely to create a structural increase in demand for cooling products, presenting Indian manufacturers with an opportunity to become credible sourcing partners as global companies diversify supply chains away from overdependence on China.
He added that future opportunities may also emerge for energy-efficient air coolers in semi-open environments such as outdoor hospitality venues, warehouses and recreational facilities, although long-term success would depend on product localisation, compliance with European standards and sustained investment in quality and innovation.
Ashish Goel, Co-founder and CEO of Optimist, said Europe’s growing cooling demand reflects a broader global shift towards climate-resilient and energy-efficient technologies. He said India’s improving manufacturing ecosystem and engineering capabilities could strengthen its position as a global production hub, but success in Europe would require strict adherence to energy standards, local regulations and the creation of reliable distribution and after-sales networks.
Bosch Home Comfort India also sees the current situation as an inflection point.
Sanjay Sudhakaran, Managing Director at Bosch Home Comfort India, said the unprecedented European heatwave has accelerated demand for sustainable cooling solutions and that Indian manufacturers, supported by investments in technology and manufacturing capacity, are increasingly well positioned to serve overseas markets while advancing the government’s “Made in India, for the World” vision.
A long game, not a seasonal one
For India’s air-conditioner industry, Europe represents more than another export destination.
It offers an opportunity to move up the global manufacturing value chain, diversify beyond traditional markets in West Asia, Africa and South Asia, and establish India as an alternative production base for advanced cooling equipment.
But the road will not be easy.
Winning in Europe will require years of investment in product development, certification, distribution networks and brand building. It will also demand that Indian manufacturers compete with some of the world’s largest appliance companies on quality, innovation and sustainability rather than price alone.
Yet if Europe’s increasingly frequent heatwaves become the norm rather than the exception, the continent’s cooling market could emerge as one of the defining export opportunities for India’s consumer durables industry over the next decade.
For Indian manufacturers, the question is no longer whether Europe needs more air conditioners. It is whether they can move quickly enough to claim a meaningful share of that market before entrenched global rivals tighten their grip.
With inputs from agencies.
