As temperatures begin to rise across the country, major manufacturers of room air conditioners are raising prices by roughly 5–15 percent in response to ongoing increases in raw material and supply chain costs.
These price revisions are being introduced gradually between February and April, just before the summer months when demand for air conditioners typically increases significantly.
AC Manufacturers Raise Prices by 5–15% Ahead of Peak Summer Demand Amid Rising Costs
Several major brands—including Daikin, Voltas, Blue Star, LG, Haier, and Mitsubishi Heavy Industries—have already announced price increases across different models.
The companies say the adjustments are necessary because of higher costs for important raw materials such as copper, the weakening of the Indian rupee, newly introduced energy-efficiency standards, and increased freight expenses.
Despite these unavoidable price increases, industry leaders remain optimistic that sales will remain strong this year, largely due to expectations of a hotter summer and the energy savings offered by newer star-rated air-conditioning models.
For example, Daikin India plans to increase prices by as much as 12 percent beginning in April, although the exact increase will vary depending on the specific model.
The company’s Chairman and Managing Director, Kanwaljeet Jawa, explained the reasons behind the increase.
He stated, “The new energy norms have come, which have made products more efficient. Also, prices of materials such as copper have gone up; the US dollar is at an all-time high (in comparison to the Indian rupee). Besides, there are a lot of uncertainties due to global turmoil, and freight costs have also gone up, making imports (of components) costlier. So there is no alternative.”
AC Makers See No Option but Price Hikes, Yet Remain Optimistic About Strong Summer Demand
Jawa further emphasized that companies have little choice in the matter, noting that every manufacturer in the industry has implemented price increases.
When discussing the potential impact on demand, he remained confident about future sales.
According to Jawa, “We are expecting a hot summer in 2026. At least it should touch the levels of 2024, when the industry had record sales. I think this year it should see at least a 15 per cent growth.”
Meanwhile, Blue Star has already raised its prices by around 8–10 percent starting in mid-February.
Its Managing Director, B Thiagarajan, explained that the market has not yet fully reflected the increase because older inventory priced at previous rates is still being sold.
He noted that retailers had anticipated the upcoming price hike and therefore stocked up on units before the increase took effect.
As a result, dealers are currently selling older inventory at previous prices, while the newer and more expensive models will reach the market gradually.
Looking back at industry performance, the year 2025 proved challenging for the room air-conditioner market.
Sales declined partly due to unexpected rainfall and other market factors that reduced demand.
This slowdown followed a strong year in 2024, when severe heatwaves across many parts of India significantly boosted sales.
Experts believe that the industry will face intense competition this year as manufacturers compete aggressively for market share after experiencing negative growth in 2025.
Another major player, Voltas—a company under the Tata Group and one of the leaders in the air-conditioner market—is also implementing price increases of 5–15 percent.
The company stated that the adjustment is necessary to pass on the rising cost of raw materials and other expenses to consumers.
Voltas Managing Director Mukundan Menon elaborated on the situation.
He said, “Over the past few months, input costs have been steadily increasing, driven by 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 to our customers, we will be undertaking a modest and carefully calibrated price adjustment in the range of 5-15 per cent during the year.”
Similarly, LG Electronics India has introduced price increases linked to the new energy-efficiency standards.
According to its Director and Co-Chief Sales and Marketing Officer, Sanjay Chitkara, prices have risen by about 7 percent for 3-star models and approximately 9–10 percent for 5-star models.
Chitkara explained the benefits of the updated products.
He stated, “These energy-efficient ACs deliver roughly 11 per cent better efficiency, which helps consumers save on electricity bills over time, even as input costs like copper and aluminium remain much higher than last year. At the same time, the GST reduction from 28 per cent to 18 per cent has largely offset this additional cost, making the transition to more energy-efficient ACs easier for consumers.”
A major reason behind these changes is the updated star-rating system introduced by the Bureau of Energy Efficiency.
The revised ratings came into effect on January 1 this year.
Under the updated standards, a new 5-star room air conditioner must now be about 10 percent more energy efficient than earlier models.
Haier India has also increased its air-conditioner prices, with hikes ranging from 5 to 8 percent.
The company’s President, N S Satish, said the increase applies differently across models.
He explained, “We are increasing 5 per cent for 3-star models and around 8 per cent for 5-star products.”
Satish also mentioned that the revised prices will take effect starting in March.
Regarding demand trends, he observed that sales have already begun improving as temperatures have started to rise.
In fact, he believes sales this year may even surpass the levels seen in 2024.
Meanwhile, Mitsubishi Heavy Industries has also implemented a price increase of around 5 percent for its air-conditioning products.
According to its Director, Pradeep Bakshi, the primary reason for the increase is the depreciation of the Indian rupee against the US dollar.
Overall, the room air-conditioner market in India is estimated to be approximately 13.5 million units in size.
Within this highly competitive market, companies such as Voltas, LG Electronics, Daikin, Blue Star, Hitachi, Panasonic, and Lloyd continue to compete for customers and market share.
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