AC prices to rise 5-15% as expensive copper, weak rupee and new energy norms push costs

New Delhi: As the mercury starts rising, leading room airconditioner makers are increasing prices in the range of 5-15 per cent to offset sustained increases in raw material costs and supply chain expenses.

The hikes, being rolled out between February and April, come just ahead of the peak summer season when demand typically surges.

Leading players, including Daikin, Voltas, Blue Star, LG, Haier, and Mitsubishi Heavy Industries, have announced increases across models, passing on higher input costs for key raw materials such as copper, a weaker rupee, new energy-efficiency norms and an increase in freight costs.

Industry executives said while adjustments are unavoidable, they expect strong sales momentum this year, aided by forecasts of a hotter summer and improved energy savings from new star-rated models.

Daikin India is going to increase prices by up to 12 per cent from April, and the hike in prices would depend on model to model, its Chairman & Managing Director Kanwaljeet Jawa told PTI.

"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," 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 hike will impact sales of room airconditioners this year also, he said, "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..

Blue Star Managing Director B Thiagarajan said the company has already taken a price increase of 8-10 per cent in the middle of February. However, old-priced inventory is still in the market, hence there is not much difference in the market.

"Dealers lifted stocks earlier as a price increase was going to happen. They bought in early, so they will be selling the old stock," he said, adding that a new batch, priced higher, will take some time to reach the market.

This price hike will almost negate the benefits extended under GST 2.0 reforms on RAC, in which tax was reduced by 10 per cent to 18 per cent from the previous 28 per cent.

"For the customer only good news is the GST benefit is compensating that. So, if you look at it from December to March, there will be a price increase. But if you see year to year, the price increase would not be there," he said.

Last year proved challenging for the room airconditioner industry, as sales were impacted on account of unseasonal rainfall, along with other factors. The industry had a very good growth a year before that, in 2024, when several parts of the country saw intense heatwaves.

According to experts, this year there will be stiff competition in the Indian room airconditioner segment, where makers will compete for market share gains after having a negative growth in 2025.

Tata group firm and leader in the market, Voltas, is also going for a 5-15 per cent hike in its room airconditioner prices, passing on the cost increase in raw materials and others to consumers.

"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," Voltas Managing Director Mukundan Menon said.

Similarly, with the new energy norms, LG Electronics India has also "increased about 7 per cent for 3-star models and around 9-10 per cent for 5-star models", said its Director & Co-Chief Sales & Marketing officer Sanjay Chitkara.

"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," he said.

This year a new revised star rating from the Bureau of Energy Efficiency (BEE) became effective from January 1. Now, a new 5-star room airconditioner under the new revised BEE norms is 10 per cent more energy efficient.

Haier India has also increased prices between 5 and 8 per cent, said its President N S Satish.

"We are increasing 5 per cent for 3-star models and around 8 per cent for 5-star products," he said, adding that this increase will be effective from March onwards.

On sales this year, Satish said it has 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, a global leader in advanced air-conditioning solutions, also increased the prices of its AC by 5 per cent, said 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 airconditioner market is estimated to be around 13.5 million units, in which players, including Voltas, LG, Daikin, BlueStar, Hitachi, Panasonic, and Lloyd, etc compete.