As the mercury rises, leading air conditioner manufacturers are increasing prices by 5-15% to offset rising raw material costs and supply chain expenses.
These price hikes, occurring between February and April, coincide with the peak summer season, typically characterized by increased demand.
Leading companies, including Daikin, Voltas, Blue Star, LG, Haier, and Mitsubishi Heavy Industries, have announced price increases across their models, passing on higher costs for key raw materials such as copper, a weaker rupee, new energy efficiency standards, and increased freight costs.
Industry executives say that while adjustments are inevitable, they expect strong sales this year, driven by forecasts of a hotter summer and improved energy savings from new energy-efficient models.
Daikin India is planning to increase prices by up to 12% from April, according to Kanwaljeet Jawa, its Chairman & Managing Director.
"The new energy norms have made products more efficient. Also, the price of materials like copper has increased; the US dollar is at a record high compared to the Indian rupee. In addition, there are many uncertainties due to global events, and freight costs have also increased, making imports more expensive. So, there is no alternative," he said.
"There is no escape route for that, and every player in the industry has taken a price increase," Jawa added.
When asked if this increase would impact sales of room air conditioners this year, he said, "We are expecting a hot summer in 2026. At least it should reach the levels of 2024, when the industry had record sales. I think this year it should see at least a 15% growth."
Blue Star Managing Director B Thiagarajan said the company had already implemented an 8-10% price increase in mid-February. However, existing inventory remains, so there is not much difference in the market.
"Dealers had already stocked up in anticipation of the price increase. They bought early, so they will be selling the existing stock," he said, adding that new stock with higher prices will take time to reach the market.
This price hike will largely negate the benefits of GST 2.0 reforms on room air conditioners, which reduced the tax rate from 28% to 18%.
"For the customer, this is good news because the GST benefit is compensating for that. So, if you look at it from December to March, there will be a price increase. But if you look at it year on year, the price increase will not be there," he said.
Last year was challenging for the room air conditioner industry due to unseasonal rainfall and other factors. The industry had experienced significant growth in 2024 due to intense heatwaves.
Experts predict stiff competition in the Indian room air conditioner segment this year, where manufacturers will compete for market share after experiencing negative growth in 2025.
Voltas, a Tata group company and market leader, is also increasing prices by 5-15% to pass on raw material and other cost increases to consumers.
"Over the past few months, input costs have been steadily increasing due to rising copper prices, a weakening rupee, and the implementation of new energy efficiency standards. To ensure we continue delivering high-quality, energy-efficient air conditioners, we will be undertaking a modest and carefully calibrated price adjustment of 5-15% during the year," said Mukundan Menon, Managing Director of Voltas.
Similarly, LG Electronics India has "increased prices by about 7% for 3-star models and around 9-10% for 5-star models," according to Sanjay Chitkara, Director & Co-Chief Sales & Marketing Officer.
"These energy-efficient ACs deliver roughly 11% better efficiency, which helps consumers save on electricity bills over time, even as input costs like copper and aluminum remain much higher than last year. At the same time, the GST reduction from 28% to 18% has largely offset this additional cost, making the transition to more energy-efficient ACs easier for consumers," he said.
A new revised star rating from the Bureau of Energy Efficiency (BEE) became effective from January 1. Now, a new 5-star room air conditioner under the new revised BEE norms is 10% more energy efficient.
Haier India has also increased prices between 5 and 8%, according to its President N S Satish.
"We are increasing prices by 5% for 3-star models and around 8% for 5-star products," he said, adding that this increase will be effective from March onwards.
Satish said sales have started picking up from last week as the temperature has started rising. He also expects sales to be better than 2024 this year.
Mitsubishi Heavy Industries has also increased prices by 5%, according to its Director Pradeep Bakshi. According to Bakshi, the prices are going up due to the weakening of the Indian rupee against the US dollar.
The room air conditioner market is estimated to be around 13.5 million units, in which players, including Voltas, LG, Daikin, BlueStar, Hitachi, Panasonic, and Lloyd, etc compete.
