Air conditioner prices to rise 7-8% from Jan '26 on new models

Room air conditioner prices are set to rise by 7-8% on new models from January '26 due to new star-rating norms and inflation. An Equirus report notes consumers are pre-buying existing stock ahead of the expected price surge and new regulations.

AC Prices to Rise on New Star-Rating Norms

Consumers planning to purchase room air conditioners (RACs) may have to prepare for higher prices from this year, as the industry is expected to implement price hikes of 7-8 per cent on new models starting January 2026, according to a report by Equirus.

The report stated that the upcoming price increase will be driven by the implementation of the new star-rating regime, effective from January '26, and by persistent commodity inflation. It noted that industry-wide price hikes of 7-8 per cent are expected on new RAC models, with another round of price increases likely during April-May. This is expected to reset industry pricing levels and support margin normalisation through calendar year 2026. It stated "With the new star-rating regime effective from Jan'26 and commodity inflation persisting, industry-wide price hikes of 7-8 per cent are expected on new models"

From a consumer perspective, this means new air conditioner models launched next year are likely to cost more. The report added that channel feedback already indicates strong pre-buying activity in December, as dealers and buyers stock up on existing models ahead of the new norms and anticipated price hikes.

Industry Volatility in Past Years

The report highlighted that the Indian RAC industry experienced significant volatility over the past two years. After an exceptional performance in calendar year 2024, when the industry recorded nearly 40 per cent growth, calendar year 2025 proved to be significantly challenging. Factors such as adverse weather conditions, GST transition-related disruptions, elevated channel inventory, and aggressive customer support schemes led to demand volatility and pressured industry profitability for most of the year.

Strong Rebound Expected in CY26

Looking ahead, the report said the outlook for CY26 appears positive. Channel expectations point to volume growth of 20-22 per cent. The recovery is expected to be supported by a favourable base, pent-up demand, aggressive stocking of old star-rated models, and expectations of a normalised summer season.

Overall, while demand for room air conditioners is expected to rebound strongly in CY26, the report cautioned that consumers are likely to face higher prices as new models compliant with the revised star-rating norms enter the market. (ANI)

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