Extreme heat could create a $1.6 trillion cooling opportunity for India, says World Bank

The report says sustainable cooling will become essential for economic growth as cities get hotter and heat reduces productivity. It adds that the market for sustainable cooling across developing economies could exceed $600 billion every year by 2050. “Extreme heat is not only a climate challenge but also a major business opportunity,” the World Bank said in the report.

Why is India’s cooling market set to grow?

The World Bank says rising temperatures are making cooling a necessity rather than a seasonal comfort. As heatwaves become more frequent and intense, households, businesses and industries will need more cooling equipment to protect workers, maintain productivity and improve living conditions.

The report links climate change directly with future industrial growth. It says heat is reducing labour productivity, damaging jobs and making cities more difficult places to work. As a result, demand is shifting towards cooling technologies and industries that can help people and businesses adapt to higher temperatures.

India is expected to play a major role in this transition. The report says South Asia must absorb nearly 280 million new working-age people by 2050 while also dealing with worsening heat. To support economic growth, cities will need better cooling systems, climate-resilient buildings, reliable electricity and stronger infrastructure.

The report also says demand for cooling is already rising across the region. The World Bank report speaks about Bangladesh, where around 550,000 air conditioners were sold in 2025, nearly three times the number sold five years earlier. The World Bank says this shows the shift towards cooling technologies has already begun.

Which sectors could benefit the most?

The report identifies cooling equipment as one of the biggest investment opportunities. Demand is expected to rise for affordable and energy-efficient air conditioners, fans, air coolers and refrigerators as households and businesses look for ways to cope with rising temperatures.

Manufacturing could also receive a major boost. The World Bank says a proposed Government of India programme, supported by the World Bank, could expand domestic manufacturing of affordable and efficient cooling devices.

If implemented, the programme could create nearly 3.7 million jobs by 2040, according to the report. That could strengthen India’s position as a manufacturing hub for cooling technologies while also improving access to affordable products.

The report also identifies green buildings as another fast-growing investment area. It says developers and investors will find new opportunities in energy-efficient and climate-resilient buildings designed to reduce heat and lower energy consumption.

Insurance is another sector expected to grow. The World Bank says heat-risk insurance and parametric insurance could become increasingly important as businesses and communities seek protection against financial losses caused by extreme heat.

Cooling solutions for manufacturing, agriculture and healthcare are also likely to see greater demand as industries adapt to hotter conditions.

The report says governments alone cannot finance the investments needed to respond to rising temperatures. It says private investment will play a critical role in expanding cooling devices, resilient buildings, cooling infrastructure and insurance markets.

The economic case for investment is becoming stronger as the cost of inaction rises. According to the report, extreme heat already wipes out the equivalent of 31 million full-time jobs every year across South Asia. Without stronger adaptation measures, the region’s GDP could be nearly 7% smaller by 2050.

The World Bank says investment in sustainable cooling is no longer only an environmental issue. It has become an economic necessity that can protect jobs, support growth and create new industries as climate risks increase across South Asia.