New Delhi, March 22 Air conditioner manufacturers are proceeding cautiously after unusual rainfall triggered by western disturbances swept large parts of the country, which could potentially disrupt early summer demand, which typically drives sales.
The industry is also concerned about the recently announced price increases amid the ongoing geopolitical tension in West Asia, which has led to an increase in the prices of raw materials, such as plastics, while limited availability of LPG gas, impacting production.
Because of the plastic, prices of other large appliances such as washing machines are also likely to rise by 10-12 per cent, industry leaders indicated.
March is traditionally when demand for cooling products accelerates, but the unusual weather has left manufacturers concerned. However, industry executives remain hopeful as they expect a rise in temperature in April.
"If you look at the weather, beyond next week, the temperature is moving up now in Delhi and parts of north India," said Kamal Nandi, Business Head and EVP, Appliances Business of Godrej Enterprises Group.
Regarding any possible impact on sales, he said, "It's too early to say, we might think of intermittent rain in some parts. This is not an indicator that the temperature is not moving up."
Nandi expects the situation to normalize in April.
He said the industry has already implemented price increases earlier this year, when the new energy labelling was mandated by BEE from January.
"This will be the second hike because oil prices and plastic prices are going up and freight cost is growing," he said, adding, "More than the weather, I am concerned about the demand because the price hike that will take place in April and this is going to impact the industry because everyone has taken a price hike."
A price increase of 5-10 per cent is expected by Godrej from April 1, 2026.
Haier India President N S Satish said the supply of LPG has been reduced to the plants, and if this situation persists, there will be a production cut of 20-30 per cent, just before the peak month.
To prioritize household cooking gas, supply to industrial and commercial consumers was reduced from 80 per cent to 65 per cent of their average consumption.
"This means my RAC (room air-conditioner) production will be reduced… paint shops in RAC production use LPG as fuel for high-temperature drying," he said.
Satish also expressed concern about the rise in the price of plastic, which are used in large appliances such as washing machines and refrigerators.
"In segments such as washing machines, 20 per cent of the material cost is plastics," he said, adding, "we will have to increase the price by 10-12 per cent".
This may even lead to downgrading within the segment, where a customer purchases a lower-capacity, lower-quality product to offset the increased cost.
Blue Star MD B Thiagarajan also said plastic prices are rising, along with other input materials. The industry, which is already operating on a thin margin, will pass this on to consumers.
"Unless this conflict (in West Asia) comes to an end before March, I am not betting high on the summer season," he said, adding that there will be growth this year compared to last year but not as good as 2024, when the industry created a record amid intense heatwaves around the country.
2025 was not a good year for the RAC industry, as unseasonal rain and other factors impacted sales.
According to experts, this year will see stiff competition in the Indian RAC market, with manufacturers competing for market-share gains after negative growth in 2025.
The Indian RAC market is estimated to be around 13.5 million units, in which players, including Voltas, LG, Daikin, BlueStar, Hitachi, Panasonic and Lloyd, etc, compete.