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The future of boilers: India’s market shifts, global risks and the power of AI
Articles- Dec 02,25
This article examines how efficiency mandates; fuel transitions and AI-driven digitalisation are reshaping modern boiler technology and steam systems, with insights from Vinod Kumar Luthra, Chief Executive-Boiler and Power Division, ISGEC Heavy Engineering Limited.
For meeting the demand of steam for process and power, boilers are an important and reliable technology of modern industry. From steam for textile dyeing and chemical reactors to process heat in food processing, paper, petrochemicals, and power generation, boilers remain a lifeline of manufacturing and utilities. This segment is, however, undergoing a meaningful transition. Stringent efficiency and emissions requirements, fuel shifts, digitalisation and new business models are reshaping the demand and supplier strategy — both in India and globally.
This article maps the market dynamics in India, summarises global trends, examines the main challenges and risks, and outlines opportunities, with a special focus on digital transformation and AI.
1. Market dynamics in India
India’s industrial base is large, diversified and still expanding thereby, creating a steady demand for new and replacement boilers. Several factors contribute to this:
a) Industrial growth and capacity expansion. Sugar, chemicals, distilleries, refineries, rubber, tyre, textiles, food processing, paper, pharma and cement are a few industrial sectors which are highly dependent on steam. Over the years, with the “Make in India” drive, manufacturing sectors that use steam are growing as India strengthens manufacturing and exports. This fuels a demand for both packaged and large water-tube boilers as greenfield projects and existing capacity upgradations continue. Market reports indicate a fast growing industrial-boiler segment and has a sustained growth forecast. While the power sector has reached considerably to a stable height, demands for process steam continues.
b) Energy-efficiency policies and retrofit cycles. India’s National Mission for Enhanced Energy Efficiency (NMEEE), implementation of the Perform-Achieve-Trade (PAT) scheme and active Bureau of Energy Efficiency (BEE) programmes have pushed industry to cut fuel use and emissions. These policies promote upgrading old boilers to higher-efficiency models, absorption of low-grade heat considering the addition of economisers and air heaters, waste-heat recovery and process integration measures. All of these accelerate replacement and retrofits of existing units.
c) Fuel economics and availability. India’s boiler technology and requirement is highly fuel-diverse with coal/biomass in some sectors, natural gas where pipelines exist, and fuel oil or heavy residues in others. The increasing reach of gas pipelines, metal-price cycles, and the competitive price of biomass in agro-processing regions influence whether plants replace coal-fired boilers with gas, biomass or hybrid systems. Government programmes for biomass co-firing and incentives for cleaner fuels also impact the purchase decisions but at the same time increases the boiler R&M business.
d) Compliance and workplace safety. Tighter enforcement of safety and emission norms, both for public health and to align with global supply-chain expectations, pushes older, less reliable units off the factories and opens opportunities for certified OEMs and service providers. This results in higher aftersales and services, inspection and training revenue along with the sales of main boilers.
e) Aftermarket and services. The already installed base of boilers creates a steady and large aftersales for maintenance, boiler-feedwater treatment, spare parts, controls upgrades and services-based contracts. Indian end-users increasingly prefer service guarantees (including efficiency guarantees) that create an opportunity for recurring revenues for suppliers.
Considering the above, India is not only buying boilers; it is upgrading, digitising and shifting the way boiler lifecycle economics are structured. Market forecasts show a positive growth consistently for many years to come.
2. Global market insights
The global boiler industry is simultaneously mature and dynamic. Key drivers that determine industry trends are:
a) Energy transition and emissions regulation. Stricter NOx, SOx and particulate controls, along with decarbonisation commitments in many countries, are pushing buyers towards higher-efficiency boilers, electrified heat and hydrogen-capable burners. Regions having stringent emissions standards are accelerating replacement of old fossil-fuel based boilers.
b) Shift from capacity to efficiency and services. In developed countries, the focus is mostly less about adding capacity for power and steam generation and more on squeezing more steam or heat from existing inputs. This increases demand for retrofits, hybrid systems and digital services (analytics, predictive maintenance, controls upgrade etc).
c) Industrialisation in emerging markets. Continued industrial growth in Southeast Asia, Africa and parts of Latin America raises baseline demand for process heat. New manufacturing capacity, especially in food processing, chemicals and textiles, remains a major market for growing requirement for boilers.
d) Supply-chain and OEM consolidation. Major global players (large OEMs and system integrators) continue to consolidate through acquisitions, while specialised local firms compete on service or technology. This shapes pricing, financing options and global availability of advanced boiler models.
e) Fuel and feedstock volatility. Dynamic price changes of natural gas, coal and biomass and regional constraints such as LNG shipping costs impact buyers’ decision based on the lifecycle cost analyses. These economic variables determine whether a plant opts for fuel conversions or incremental efficiency upgrades.
Aggregate market reports indicate a huge global market potential which will be sustainable for many years to come – driven by replacements, retrofits and digital services rather than pure new boilers in mature economies.
3. Challenges and risks for buyers and suppliers.
The boiler industry faces several structural and operational risks that need strategic responses:
a) Fuel transition uncertainty. The pace at which electrification, biomass, and hydrogen enter different markets is uncertain. OEMs and plant owners risk investing in technologies that may become stranded or require costly retrofits if the regional fuel landscape changes quickly.
b) Regulatory risk and emissions compliance. Rapid tightening of emissions and energy laws can make older designs non-compliant and increase retrofit costs for users. Compliance also often forces unplanned capital expenditure, compressing ROI for projects and sometimes delaying replacements.
c) Water and feed-water quality challenges. Boiler performance and life depend heavily on feed-water treatment. Poor water chemistry causes scaling, corrosion and catastrophic failures; many regions still lack the water-treatment discipline needed to ensure reliable long-term operation.
d) Safety, skills and inspection. Boiler incidents, though less common with modern practices, interlocks and protections, remain with high potential of damage and high-risk. A shortage of certified engineers and technicians, plus variable inspection requirements, raise operational risk and liability for owners.
e) Capital intensity and financing constraints. Replacing major boilers or converting to low-emission fuels is costly. Many small and medium enterprises struggle to find suitable financing or prefer to defer, which results in older and inefficient installed units.
f) Cybersecurity and data integrity. As boilers and their controls connect to plant networks, vulnerabilities increase. A cyber incident on a plant control system can cause safety hazards and operational downtime. Security in control systems is now a substantial risk.
4. Strategic opportunities
Every risk also contains an opportunity. OEMs and service providers must watch the following:
a) Fuel-flexible and hydrogen-ready designs. Developing technologies and controls that can switch between fuels (gas, biomass, hydrogen blends) or be relatively easily retrofitted reduces the risk of getting obsolete and out-dated. Such products and technologies also create business opportunities with forward-looking buyers.
b) Retrofit, efficiency and services. There is persistent demand for economisers, air heaters, condensate recovery, burner upgrades, instrumentation, and chemical treatment enabling suppliers to sell outcome-based contracts (guaranteed fuel savings, uptime Service Level Agreements) and capture recurring revenue. These business models reduce buyer capex limitations and improve aftersales opportunities.
c) Aftermarket digital services and remote monitoring. OEMs or third-party platform providers can combine sensors, cloud analytics and predictive maintenance to reduce unplanned downtime and improve fuel efficiency. Customers prefer to pay for reliability and lower total cost of ownership rather than just hardware.
d) Outcome-based financing. Linking financing to measured savings can accelerate replacements and align incentives between buyer and supplier. Certain ongoing programmes create market conditions favourable to such models.
e) Partnerships across the value chain. Collaboration between water-treatment firms, control system integrators, fuel suppliers and OEMs creates integrated solutions that are attractive to end users.
5. Outlook and digital transformation — AI and IoT
Digital technologies are the most immediate tool to extract more value including efficiency and reliability from existing units. Two areas that are important:
a) Predictive maintenance powered by AI/ML. Machine learning models that analyse temperature, vibration, combustion patterns, feed-water chemistry and control-loop performance can predict failures days or weeks ahead, thus allowing planned maintenance that avoids costly breakdowns. Field data has shown marked reductions in downtime and maintenance costs from AI-driven diagnostics and abnormality detection. The impact includes longer equipment life, reduced emergency repairs and better spare-parts planning.
b) Digital twins and control optimisation. Digital twins or smart simulators are real-time models of physical boilers using thermal engineering design principles. They enable optimisation of combustion, feed-water control, emission control and other critical parameters control with varying loads. The result is continuous efficiency improvement, fuel saving and lower emissions when replicated in an actual boiler. Combined with cloud analytics and edge compute, these systems can automatically adjust critical parameters to balance efficiency, emission limits and process requirements.
Beyond direct operational benefits, AI and IoT open new commercial models such as performance guarantees, and software subscriptions for optimisation and compliance reporting. For markets like India, where retrofit and service opportunities outnumber new installations, inclusion of AI-led improvements into techno commercial proposals offer value proposition.
6. Recommendations
Given below are practical recommendations for stakeholders in the boiler industry:
For OEMs and suppliers:
• Invest in modular, fuel-flexible designs and in retrofit kits.
• Build “Software as a Service”/analytics offerings and train service teams to sell outcomes instead of equipment.
• Establish partnerships with water-treatment and controls specialists to offer integrated solutions.
For plant owners:
• Prioritise feed-water treatment and instrumentation. Savings through these small investments can outsize lifetime savings.
• Evaluate outcome-based financing to overcome upfront capex constraints.
• Start pilot predictive-maintenance projects to improve ROI before scaling.
For policymakers and financiers:
• Promote retrofits with accelerated depreciation, low-interest loans or matching grants focused on efficiency and fuel switching from fossil to biomass.
• Strengthen inspection frameworks and certified training programmes to raise safety and operational capabilities.
• Use suitable mechanisms to reward verified efficiency gains and drive market transformation.
Final outlook
The boiler segment is still evolving. In India, policy frameworks, large-scale industrialisation and the vast installed base combine to create sustained demand for modern, efficient, and smarter boilers. Globally, emission regulations, fuel transitions and a growing services economy will continue to reform value towards retrofit, efficiency and digital services rather than simply capacity additions.
The combination of reliable hardware, fuel flexibility, and software-enabled services, especially AI-driven predictive maintenance and optimisation, delivers lower lifecycle costs and regulatory compliances.
Boilers are moving towards engineered, connected systems that are sold and financed as outcomes. For suppliers, owners and policymakers who align to these facts, the next decade looks like an opportunity to decarbonise, digitise and improve the profitability of this segment.
About the Author:
Vinod Kumar Luthra is the Chief Executive of the Boiler and Power Division at ISGEC Heavy Engineering Ltd, a global engineering company operating across 92 countries with a turnover of Rs 63 billion. With over 40 years at Isgec, he has significantly contributed to the company’s growth and leadership. The organisation spans diverse sectors including boilers, EPC power plants, sugar machinery, pollution control, process equipment, presses, and castings. He has led power plant projects for major clients such as TATA, JSW, Aditya Birla, Adani, JK Paper, and several international corporations.
Blurbs: (Use them if required) -- FOR PRINT
India’s boiler technology and requirement is highly fuel-diverse with coal/biomass in some sectors, natural gas where pipelines exist, and fuel oil or heavy residues in others.
Boilers are moving towards engineered, connected systems that are sold and financed as outcomes.
Industrial boilers
Steam generators
Boiler market in India
Boiler technology trends
Boiler efficiency
Boiler digitalisation
AI in boilers
ISGEC Heavy Engineering
Vinod Kumar Luthra
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