AC Prices Were Already Rising, West Asia Conflict Made It Worse

If you were planning to buy an air conditioner this summer, it’s going to cost significantly more than it did even three months ago. India’s AC makers are already pushed through cumulative price hikes of 7–9% till March, and another 7.5–12% increase kicks in from April 1.

Ahead of summer 2026, India's top air-conditioner makers like Tata's Voltas, Daikin India, LG Electronics, Haier India and Blue Star hiked their prices. It was in anticipation that a season which is expected to bring "above normal heatwaves," as per IMD, would help them recover the cost of some expensive raw materials and adoption of new star rating norms.

But, in just over a month, they are forced to hike prices once again as US and Israeli war on Iran constrains crucial gas supplies and disturbs other macroeconomic levers, according to analysts. A report by Japanese brokerage firm Nomura on Tuesday claimed that most players, including Voltas and Daikin India, have already communicated a 7.5–12% price increase for all orders invoiced from April 1, 2026. It expects others are also likely to announce similar hikes soon.

"This takes the cumulative increase to about 17–18% over the past few months," the brokerage added. And it's not alone. Earlier this month, JM Financial's analysts had also noted that "fear of a supply crunch" will make it easier for "brands to hike prices".

Why AC Will Get Costlier this Summer?

The latest price hike is mainly due to the ongoing conflict in West Asia, which has made the cost of key raw materials—especially gases like LNG and PNG—very unstable for companies.

"This (price hike) has been necessitated due to sharp increases in commodity costs, copper and crude derivatives (plastic, etc) price increases, USD/INR depreciation (5% down currently vs 3Q levels) and other supply/cost challenges from the ongoing Iran war," wrote Nomura analysts on Tuesday.

In AC manufacturing, these gases are important because they are used to create high-temperature flames that help join copper pipes inside the AC. These pipes carry refrigerant, and the joints must be perfectly sealed to prevent leaks. Right now, there is no easy alternative to this process, so any disruption in gas supply can slow down or even halt production.

The situation worsened after Iran’s retaliation against US and Israeli actions affected facilities linked to QatarEnergy, a key global gas supplier. This has disrupted supplies to countries like India. At the same time, tensions have effectively restricted movement through the Strait of Hormuz, a crucial route through which about 20% of the world’s gas supply passes daily.

Back home, the government has capped gas supply to industries at up to 80% of their recent usage to prioritise household needs, tightening availability for manufacturers.

On top of all this, prices of key metals like copper and aluminium, already rising earlier, have increased by high teens, making production costlier.

Further, the Indian rupee has depreciated by about 3.35% in the last one month against the dollar. It comes on top of about a 9% decline the INR has registered against the greenback, making imported raw materials costlier for manufacturers.

This round of hikes comes after, in mid to late February, AC makers had implemented price hikes to recover the cost of new revised star ratings from the Bureau of Energy Efficiency (BEE), which came into effect from January 1.

Under this, a new 5-star room air conditioner under the revised BEE norms is 10% more energy efficient.

It was expected by the companies that the hike of around 7–9% would be easier to absorb for consumers since it came on the back of GST rationalisation, which brought white consumer goods under the 18% slab from the earlier 28%.

How Much Price Was Passed to Consumers?

According to a comprehensive list by Nomura, air-conditioner makers have announced multiple price hikes across categories in recent months. Blue Star raised AC prices by 8–10% across different models in mid-February, Voltas implemented a 5–15% hike in mid and by the end of that month. LG Electronics hiked prices of its 3-star ACs by 7% in mid-February and for 5-star, the hike was 9–10%. Chinese consumer electronics brand Haier also implemented up to an 8% hike for its models in early March, which was followed by Mitsubishi Heavy Industries increasing prices by about 5%.

But, the brokerage expects that the net effective increase is likely to be lower, depending on the season and discounts. So far, it is about 5% till March, the note claims.

"Assuming a normal summer in April, in a scenario in which a large part of the price increase gets absorbed, it would be sufficient to pass on most of the cost pressure now," its analysts wrote.