India Gensets Market Outlook to 2028

India Gensets Market Overview

The India gensets market, valued at USD 1.6 billion, is projected to grow significantly due to the increasing demand for reliable power supply across various sectors. Rapid industrialization, coupled with the need for uninterrupted power in critical sectors such as telecom and healthcare, drives the demand for gensets in India. Additionally, frequent power outages, especially in rural and semi-urban areas, further fuel the market's growth.

The dominance of cities like Mumbai, Delhi, and Bangalore is attributed to their rapid urbanization, higher demand for power backup solutions in commercial and residential sectors, and infrastructural development. Moreover, government initiatives to boost the IT and telecom sectors in these cities create a higher demand for gensets as backup solutions for data centers and communication networks.

The government of India, under the National Smart Grid Mission, is working to modernize the electricity grid to improve power reliability. This initiative, with an allocated budget of INR 8,000 crore for 2024, is expected to reduce grid downtimes but also increase demand for gensets as businesses and industrial facilities invest in backup power solutions to ensure uninterrupted operations during grid modernization.

India Gensets Market Segmentation

By Fuel Type: The market is segmented by fuel type into diesel, natural gas, and others. Diesel gensets dominate the market due to their widespread use across industrial, commercial, and residential sectors. Their ability to provide high power output and cost-efficiency makes them the preferred choice for industries like construction and manufacturing. The growing investments in infrastructure and the need for backup power during construction activities contribute to the dominance of diesel gensets.

By Application: The market is also segmented by application into backup power, prime power, and peak shaving. Backup power holds a dominant position due to the frequent power outages in India, especially in rural and semi-urban areas. Industries such as telecom and healthcare rely heavily on backup gensets to ensure uninterrupted operations, thus driving demand for backup power solutions.

India Gensets Market Competitive Landscape

The market is characterized by the presence of both global and local players. Companies like Cummins India Ltd., Kirloskar Oil Engines Ltd., and Ashok Leyland Ltd. dominate the market due to their extensive product portfolios, reliable service networks, and innovation in genset technology.

India Gensets Market Analysis

Market Growth Drivers

Increased Power Deficit and Infrastructure Development: India has been experiencing substantial power deficits, with demand for electricity exceeding supply by a significant margin. In 2024, the country's projected shortfall in electricity generation is expected to reach around 11,000 megawatts, according to data from India's Ministry of Power. This ongoing deficit in power supply, combined with large-scale infrastructure projects, is driving the demand for gensets across construction, healthcare, and manufacturing sectors, where reliable backup power is crucial.

Expansion of Industrial and Commercial Sectors: The growing industrial and commercial sectors in India, including real estate, manufacturing, and telecommunications, have increased their reliance on gensets for uninterrupted operations. The Indian industrial sector is expected to expand, with projections estimating the commissioning of over 400 new industrial plants in 2024. The commercial sector is also seeing growth in large cities, which is further accelerating the demand for gensets.

Growth in Rural Electrification Projects: Rural electrification continues to be a key focus for the Indian government, with schemes like the Saubhagya Yojana bringing electricity to millions of rural households. However, intermittent supply remains an issue in many areas. Data from the Ministry of New and Renewable Energy reveals that 22 million households still face power shortages in 2024, thus driving demand for gensets in these rural regions to ensure uninterrupted power during grid outages.

Market Challenges

High Operating Costs of Diesel Gensets: Diesel gensets remain the most popular in the Indian market, but their high operational costs due to fluctuating diesel prices pose a challenge. In 2024, the average cost of diesel in India is anticipated to hover around INR 90 per liter, making it an expensive option for running gensets over extended periods. This cost factor deters some businesses from opting for gensets, especially for continuous use.

Strict Emission Regulations: In recent years, the Indian government has tightened emission norms for diesel gensets to curb pollution. The latest emissions standards, CPCB-II, have placed stringent requirements on diesel genset manufacturers, making compliance more difficult. The enforcement of penalties for non-compliance in 2024 is expected to cause delays in new genset installations, particularly in urban areas, where emission regulations are most stringent.

India Gensets Market Future Outlook

Over the next five years, the India gensets industry is expected to experience robust growth, driven by increased demand for reliable power solutions in various sectors. The expansion of industries like IT, telecom, and manufacturing, along with infrastructural development in urban and rural areas, will play a critical role in the market's growth.

Future Market Opportunities

Increased Demand from the Healthcare Sector: The healthcare sector is expected to become a significant contributor to the genset market in the coming years. By 2029, hospitals and medical facilities are projected to invest heavily in gensets to ensure uninterrupted power for critical medical equipment, with over 7,000 gensets expected to be installed in healthcare facilities alone by the end of 2029.

Digitalization of Genset Monitoring: Over the next five years, the genset market will witness a growing trend of digital monitoring and control systems. Manufacturers will increasingly integrate IoT-based solutions, enabling remote monitoring of genset performance, fuel consumption, and emissions. By 2029, over 40,000 gensets in India are expected to be equipped with advanced monitoring systems, enhancing operational efficiency and reducing maintenance costs.
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