Air conditioner prices are set to rise further in the coming months due to a sharp 14-16% increase in input costs and new energy efficiency norms, according to Blue Star MD Vir S Advani. Prices are unlikely to ease in the near term.
AC Prices to Surge Amid Rising Costs
Air conditioner prices are set to rise further in the coming months due to sharp increase in input costs across commodities such as copper, aluminium, and steel in addition to the new energy efficiency norms introduced in January 2026, according to Vir S Advani, MD, Blue Star Ltd and Chairman, Confederation of Indian Industry (CII) Western Region.
Speaking with ANI on the sidelines of the CII-BFSI summit 2026, Advani highlighted that input costs across the manufacturing sector have seen an unprecedented surge. "Across the board, cost has gone up about 14 to 16% in our industry, which is unprecedented. The last time we had this kind of cost increase was back in 2011," he said.
He noted that the combined effect of rising raw material prices and revised energy efficiency standards is driving up overall product costs. "We had an energy table change on January 1, 2026. So a lot of the sales in Jan, Feb, March in the market were what we call older BE table products, which are less efficient and therefore less expensive," he explained.
Advani indicated that prices are unlikely to ease in the near term. "Unfortunately, not. As this cost increase comes into the supply chain, cost is actually going to increase as we go forward over the next few months," he said, adding that companies are working to soften the impact through value engineering and cost optimisation. He further stated that the industry may face inflationary pressures for the next 12 to 18 months, requiring gradual adjustment from both manufacturers and consumers as the market adapts to evolving price dynamics.
Synergy in Real Estate and BFSI Sectors
On the real estate and Banking, Financial Services, and Insurance (BFSI) sector, Advani highlighted the growing synergy between the two and said it will be key to future growth. He added that India's real estate sector is becoming a key destination for institutional capital.
"India's real estate sector has evolved into a key avenue for institutional capital, driven by strong investor confidence, reforms, and the growing role of REITs. Sustained policy support, regulatory clarity, and closer alignment between industry and financial institutions will be critical to maintaining this momentum and expanding investment across segments and cities," he said.
He further added that real estate and BFSI together form a strong growth engine for the economy. "Real estate and BFSI together form a powerful engine of India's growth. With the sector contributing 7-8% to GDP and projected to reach ~13% by 2030, stronger linkages between the two will unlock investment, support sustainable development, and help shape future-ready cities," Advani said. (ANI)
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