Air Conditioner Price Hikes Expected as Raw Material Costs and Currency Fluctuations Increase

Air Conditioner Prices Rise Up to 15% as Manufacturers Pass on Higher Costs Ahead of Summer​

AC Makers Increase Prices Amid Rising Input Costs and Energy Efficiency Changes​

New Delhi, March 8: Leading air conditioner manufacturers in India have raised prices by 5 to 15 percent as rising raw material costs and supply chain expenses continue to pressure the industry. The price hikes, which began in February and are expected to continue through April, come just ahead of the peak summer season when demand for cooling appliances typically rises.

Major brands including Daikin, Voltas, Blue Star, LG, Haier, and Mitsubishi Heavy Industries have implemented price increases across several models. The adjustments reflect higher costs for key raw materials such as copper, a weaker Indian rupee against the US dollar, new energy efficiency requirements, and rising freight charges.

Raw Material Costs and Rupee Weakness Drive Price Hikes​

Industry executives say the price increases have become unavoidable due to multiple cost pressures.

Kanwaljeet Jawa, Chairman and Managing Director of Daikin India, said the company will increase prices by up to 12 percent starting in April.

He said the introduction of new energy efficiency standards has improved product efficiency but also increased production costs. At the same time, the prices of key materials such as copper have risen, while the Indian rupee remains weak against the US dollar. Global uncertainties and higher freight costs have also made imports more expensive, leaving manufacturers with limited options but to raise prices.

Jawa added that price increases have been implemented across the industry.

Strong Demand Expected Despite Higher Prices​

Despite the price hikes, companies expect strong demand this summer due to forecasts of higher temperatures.

Jawa said the industry expects the summer of 2026 to at least match the strong demand levels seen in 2024, when record sales were recorded. He estimated that sales could increase by at least 15 percent this year.

Dealers Selling Existing Inventory at Older Prices​

Blue Star Managing Director B Thiagarajan said the company had already increased prices by about 8 to 10 percent in February. However, the impact on retail prices is currently limited because dealers stocked up in advance.

He said dealers purchased large volumes of inventory before the price increase, so the existing stock is still being sold. New shipments with revised prices will gradually reach the market.

Industry Recovery After Weak 2025​

Sales of room air conditioners were affected in 2025 due to unseasonal rainfall and other factors. The industry had previously recorded strong growth in 2024 as several regions experienced intense heatwaves.

Manufacturers now expect intense competition in the Indian room air conditioner market as companies aim to regain market share after the slowdown in 2025.

Voltas, LG, and Haier Announce Price Adjustments​

Voltas has also raised prices for its room air conditioners by 5 to 15 percent.

Mukundan Menon, Managing Director of Voltas, said input costs have steadily increased over the past few months due to higher copper prices, a weaker rupee, and the implementation of new energy efficiency standards. He said the company is undertaking a carefully calibrated price adjustment to continue delivering energy efficient air conditioners.

LG Electronics India has increased prices by about 7 percent for 3 star models and around 9 to 10 percent for 5 star models, according to Sanjay Chitkara, Director and Co Chief Sales and Marketing Officer.

Chitkara said the latest energy efficient air conditioners deliver around 11 percent better efficiency, helping consumers reduce electricity bills over time even though input costs for copper and aluminum remain higher than last year. He added that the earlier reduction in GST from 28 percent to 18 percent has largely offset the additional costs, easing the transition to more efficient appliances.

Haier India has also implemented price increases between 5 and 8 percent. N S Satish, President of Haier India, said prices have risen by around 5 percent for 3 star models and about 8 percent for 5 star products, effective from March.

Satish added that sales have already started picking up as temperatures begin to rise, and the company expects stronger demand than in 2024.

New BEE Star Rating Improves Energy Efficiency​

The revised star rating standards issued by the Bureau of Energy Efficiency became effective on January 1. Under the updated norms, a new 5 star room air conditioner is about 10 percent more energy efficient compared with previous standards.

Mitsubishi Heavy Industries Also Raises Prices​

Mitsubishi Heavy Industries has also raised air conditioner prices by around 5 percent.

Pradeep Bakshi, Director of the company, said the increase is primarily due to the weakening of the Indian rupee against the US dollar.

India’s Room Air Conditioner Market Size​

India’s room air conditioner market is estimated at around 13.5 million units. Leading brands competing in the segment include Voltas, LG, Daikin, Blue Star, Hitachi, Panasonic, and Lloyd.