how good is the market for smart homes in india

How Good Is The Market For Smart Homes In India?

Home automation industry outlook

India's smart home market has witnessed tremendous changes in recent years. Earlier, the smart homes industry featured only homes with advanced safety solutions. However, the market has entered new areas, such as gas leakage detectors, advanced lighting systems, fire detection systems, smart thermosets, and entertainment systems. At present, along with the safety systems, the market is also involved in providing energy-efficient solutions.

Smart home ecosystem

Key vendors in the market are adopting initiatives to fulfill the growing demand for advanced smart home technologies. Even though the penetration of smart home systems in India is low compared to other countries, the COVID-19 pandemic has raised the adoption of connected devices in recent years.

Growth of the smart home market

The smart home in the Indian market is still on the growth curve but is gradually witnessing significant demand among the upper-middle-class population, which is expected to be the primary factor driving the smart home market growth in India. This is accredited to the rapid urbanization, growing disposable income of consumers, and increasing investment in smart devices among key players in the market. 

Smart home technology trends

One of the most recent trends observed in the smart home market is the integration of artificial intelligence (AI). Artificial intelligence is changing smart home automation, making homes safer, more convenient, and more energy-efficient. Connected home devices, appliances, and systems enable users to adjust room temperature, monitor security, and lighting control remotely. Emaar Properties PJSC entered into a partnership with Xiaomi, a global technology service provider with the world’s largest Internet of Things (IoT) consumer platform, in December 2023 to introduce ‘Emaar Smart Home’-a next-generation technology for consumers to experience the modern smart home technology powered by AI.

Recently, the smart home adoption rates have risen significantly due to the growing awareness regarding the advantages of smart home technology and increasing internet penetration across emerging economies. According to the Times of India, in 2023, there are approximately 13 million smart homes in India. By 2025, an additional 12.84% penetration of smart home solutions is expected in the country in the coming years.

Market potential for smart homes

Moreover, growing consumer interest in smart home technology due to increasing government initiatives and support in the form of funds for promoting smart city development is anticipated to positively impact India’s smart home market growth. According to the India Brand Equity Foundation, under Union Budget 2021-22, the Smart Cities Mission in India has been allocated Rs. 6,450 crore (USD 868 Mn) as compared to Rs. 3,400 crore (USD 457 Mn) in FY21.

Internet of Things and smart homes

IoT is witnessing significant traction in smart home market. The incorporation of IoT in smart homes enables appliances to connect and share real-time information. This allows the device to schedule and automate tasks accordingly. Some of the emerging smart home technologies includes smart thermostats, smart TVs, air conditioners, security management system, door management system, and water management system, and robot vacuum. These systems are connected to a single network through hardwired or wireless systems such as Wi-Fi, Bluetooth, and NFC, among others. Hence, with the penetration of IoT in smart homes, the Indian smart homes market is estimated to grow significantly in the near future.

Benefits of smart home technology

One of the key factors augmenting demand for smart home technology is rising awareness regarding the benefits of smart home among consumers. Smart home technology facilitates all the critical areas of the home, ranging from energy management to safety and security management. Additionally, the incorporation of cutting-edge technologies into homes increases comfort and security. Homeowners can easily automate various tasks remotely, simplifying the daily routine and enhancing the quality of life. Moreover, voice assistants such as Alexa and Google Assistant are some of the most popular AI in smart home systems, enabling users to control smart devices and perform tasks using voice commands.

Apart from this, in terms of safety, AI-powered cameras are gaining popularity in smart home security systems as these cameras can identify and alert homeowners of potential threats. Besides, these cameras feature facial recognition and object detection systems to improve the safety and security of the house.

Future of the smart home market

In recent years, smart home has gained more significant popularity than ever before, and this is attributed to the ongoing technological advancement in home automation that have enabled homeowners to control various tasks remotely; this trend is projected to continue in the near future as well. The Bluetooth and Internet of Things (IoT) have become crucial to smart home technology. Such innovation is projected to positively impact the smart home market's future.

Currently, smart kitchens and HVAC control are some of the most affordable smart home options. This can be attributed to the growing government initiatives to promote the utilization of HVAC control and smart kitchens, in order to improve environmental sustainability and combat the challenges associated with climate change.

Smart home market competition

The startup ecosystem can be volatile, and there is a greater risk of failure or discontinuation of services or systems. Moreover, users may face challenges in terms of software updates, warranty support, and long-term compatibility. In addition, startup companies may have limited resources to offer comprehensive customer support compared to established brands in the market.

Challenges in the smart home industry

The use of home automation eventually depends on the individual budget and preferences. Due to the risk associated with the failure of the system and high cost, consumers are refraining from adopting smart home solutions.


With the growth of digital India, the smart home market is witnessing significant growth. The Digital India initiatives focus on IoT adoption, innovation, and development of digital infrastructure, which is expected to create an environment for growth, thus increasing the adoption of smart home technologies. Increasing penetration of smartphones or other devices has significantly contributed to the overall development of India’s smart home market. To sum up, smart home solutions will also be in demand in the near future due to their convenience, safety, and energy efficiency.