en.Wedoany.com Reported - LG Electronics is positioning India, with a population of 1.4 billion, as the core strategic market and global production base for its air conditioning business. The company plans to transform India into a global hub for its HVAC business by expanding local production and targeting the data center air conditioning market.
LG Electronics ranks India alongside the United States and Brazil as one of its top three global HVAC markets. A representative from the company's Eco Solution (ES) business division recently stated during a meeting with Indian journalists visiting South Korea that India is one of the countries where LG sells the most residential air conditioners, and this trend is expected to continue. India's air conditioning penetration rate is currently around 12%, up from 7% a decade ago, but still far below developed country levels. The combination of a 1.4 billion population, an expanding middle class, and cooling demand driven by heatwaves is fueling rapid market growth. According to global market research firm IMARC, the Indian air conditioning market is projected to grow at an average annual rate of 15%, from $6.15 billion (approximately 9 trillion won) last year to $21.59 billion (approximately 33 trillion won) by 2034, more than tripling in size.
LG Electronics is upgrading India from a mere sales market to a global production base. Currently, about 95% of the products it sells in India are locally produced. The company is building its third production facility, the Sri City plant, following those in Noida and Pune. With an investment of approximately $600 million (about 800 billion won), the plant is scheduled to begin production by the end of this year, primarily manufacturing air conditioners, air conditioner compressors, refrigerators, and washing machines. It aims to meet the surge in demand for home appliances in India and serve as a hub to strengthen the supply chain in South India.
LG Electronics' strategic layout in India aligns with its HVAC business expansion plans. Beyond the residential air conditioning market, the commercial air conditioning market is also growing rapidly. In particular, the Indian government's manufacturing support policies, the relocation of production bases by global companies, and the expansion of AI data center investments are expected to drive demand for system air conditioners and cooling equipment. International investment bank Bernstein predicts that India's data center capacity will expand from the current 1.5 GW to up to 8 GW by 2030. With the full-scale construction of AI data centers, demand for cooling and air conditioning equipment is expected to surge accordingly. LG Electronics recently noted that in the Indian market, not only the residential air conditioning business but also the commercial system air conditioning business holds significant growth potential. As the US-China conflict and geopolitical risks drive the diversification of production bases, India is emerging as a representative "China+1" production hub. The company plans to leverage the Sri City plant to cultivate India into a global HVAC hub encompassing sales, production, and exports.
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