Energy sector boom drives growth in cooling towers market

According to IMARC Group, the market is forecast to grow steadily, reaching $0.40 billion by 2033, at a compound annual growth rate (CAGR) of 5.10% from 2025 to 2033.

The push towards rapid industrialisation, infrastructure modernisation, and sustainable energy solutions in India is reshaping several associated markets, such as the cooling tower sector. As of 2024, the India cooling towers market is valued at $0.27 billion. It is forecast to grow steadily, reaching $0.40 billion by 2033 at a compound annual growth rate (CAGR) of 5.10 percent during 2025–2033, according to IMARC Group. This promising trajectory is underpinned by increasing investments in infrastructure, renewable energy deployment and industrial expansion, all of which demand efficient, scalable and environment-friendly cooling systems.

Market Overview

Cooling towers, crucial for managing heat dissipation in power generation, HVAC, and industrial processes, are becoming integral to India’s energy transition and urban development strategy. The market’s growth reflects a strategic shift towards energy-efficient systems that reduce operational costs and meet environmental compliance.

From the construction of smart cities to the deployment of concentrated solar power (CSP) plants, cooling towers are increasingly in demand for both traditional and emerging applications. Their heat exchange and energy conservation role is vital in the oil and gas and power generation sectors.

Renewable Energy Expansion

Renewable energy ambitions are fast-tracking the integration of cooling technologies in clean energy infrastructure. The Solar Energy Corporation of India (SECI) announced a significant milestone in 2024—a 500 MW CSP storage project intended to supply round-the-clock green energy. Unlike photovoltaic solar panels, CSP plants generate thermal energy using mirrored arrays and require cooling towers for heat rejection, even during non-sunlight hours.

In parallel, the rapid development of biofuel refineries and green hydrogen plants intensifies the need for advanced cooling technologies. These processes operate under high thermal loads and require efficient thermal management systems to ensure operational reliability and energy optimisation. As industrial players move towards decarbonisation and process optimisation, they invest in sustainable, energy-efficient cooling tower solutions.

End-User Insights

The cooling tower market is witnessing robust demand across diverse sectors, and power generation continues to be a significant segment, especially amid the global transition towards renewable and hybrid energy models that necessitate effective thermal management.

South India, followed by the country’s northern region, is experiencing strong demand fuelled by large-scale energy projects in states like Tamil Nadu and Karnataka. Meanwhile, East India is emerging as a promising growth region supported by ongoing developments in coal-fired and renewable energy projects, especially in states such as Odisha and Jharkhand.

Competitive Landscape

The Indian cooling towers market is moderately consolidated, with a mix of domestic manufacturers and global players. Key companies are focusing on technological innovations, mergers and acquisitions, and joint ventures to strengthen their market positions.

In April 2024, the Competition Commission of India (CCI) approved Protos Engineering and Paharpur Cooling Towers’ acquisition of an additional stake in Thyssenkrupp Industries India. This move highlights the strategic consolidation within the market with key players aiming to enhance their technological capabilities and customer outreach.

Other notable players are investing in research and development to deliver smarter, modular, IoT-enabled cooling towers capable of real-time performance monitoring and predictive maintenance. These features are especially valued in sectors where operational continuity and energy efficiency are paramount.

Market Trends and Outlook

The cooling tower market is evolving rapidly, strongly emphasising sustainability, efficiency and digital innovation. Amid increasing environmental concerns and regulatory pressures, manufacturers focus on water-efficient designs that reduce greenhouse gas emissions and support zero-liquid discharge (ZLD) systems, with hybrid and dry cooling towers gaining traction in water-scarce regions. Simultaneously, the demand for modular and scalable systems is rising as industries seek flexible, cost-effective solutions that adapt to changing operational requirements. Moreover, digitalisation is reshaping the landscape with smart cooling towers incorporating sensors, automation and AI-driven analytics to enable proactive maintenance, fault detection and enhanced energy optimisation.

Challenges

Despite a promising growth trajectory, the cooling tower industry faces several challenges that could hinder its expansion. Water scarcity remains a critical issue, particularly in arid regions where traditional cooling systems struggle to operate efficiently. Additionally, adopting advanced technologies while offering improved performance and sustainability often involves high initial costs that may deter smaller players. Maintenance and lifecycle management also pose significant hurdles as ensuring long-term efficiency and minimising downtime require skilled personnel and strong service infrastructure, which may not be uniformly available across all regions.

In conclusion, the cooling towers market in India is poised for robust growth through 2033, supported by strong infrastructure development, expanding renewable energy capacity, and the evolution of industrial processes. As the country strives to meet its energy efficiency and sustainability goals, cooling towers will be pivotal in enabling smart, resilient, and green growth.

With opportunities in both traditional and emerging sectors and increasing demand for modular, scalable, and eco-friendly solutions, the industry will likely witness continued innovation and strategic collaboration. For stakeholders across infrastructure, energy, and manufacturing, cooling towers represent not just a utility component but a cornerstone of the modern industrial ecosystem in India.