AC prices to go up by 15% this summer: Voltas MD

Air conditioner (AC) prices are expected to go up by as much as 15% this summer season, owing to elevated copper prices and new energy efficiency norms, according to Mukundan Menon, the managing director of Voltas Ltd.

“In February 2025, copper was trending at around $8,000 per tonne. Now, it is roughly $13,000 per tonne. That is moving up the prices significantly,” Menon told Business Today in an interview.

The new bureau of energy efficiency (BEE) norms, that came into effect from January 2026, are expected to increase the price of a 3-star-rated AC by 5% and that of a 5-star-rated by 10-12%, Menon said, adding that AC prices will go up by 5-15% this summer when the new products come into the market.

“To make ACs more energy efficient, we use a larger compressor and put more copper into it. All this has resulted in price increases between 5% and 12%,” the Voltas MD explained.

The Tata group company is India’s biggest AC manufacturer, accounting for 18% market share in air conditioners at the end of 2025.

The GST rate cut from 28% to 18% on air conditioners in September 2025 hasn’t helped either. While companies passed the benefits to the consumers and prices came down by about 7.8%, the timing was such that the summer was gone and the winter was coming in, not the ideal time when many people buy an AC, said Menon. “The raw materials price increase has more than offset the benefits of the GST cut.”

AC makers made a fortune in the sweltering summer of 2024, when temperatures soared past 50 degrees Celsius in several parts of the country. Buoyed by this demand, many brands overstocked in 2025. However, the AC market fell due to early monsoon.  

“Every company started liquidating the stocks by offering discounts and margins took a hit in 2025. In 2026, most of the brands seem to be grounded in the fact that the summer of 2024 may not happen again. So, people are looking at a 15% hike in prices on the lower base of 2025,” said Menon.

About 15 million air conditioners are sold in India each year. 70% of this demand comes from first-time buyers, said Menon. “India is a very high first-time buyer market. So, the value-seeker market continues to be very important,” the Voltas MD says, adding that he expects Voltas’ sales to grow 20% in 2026.

Even though China has been a key supplier of AC compressors to Indian companies, the Voltas MD expects India to become “self-dependent.” “Compressor manufacturing used to be very dependent on China. Fortunately for us, there are many Chinese brands who have set up shop here. So, the local manufacturing ecosystem is developing. Out of the 15 million units for which compressors are needed, roughly 7 million compressors are getting manufactured here in India. Over the next one year, that will go to almost 14-15 million compressors,” Menon explained.

As a result, localization levels in the air conditioning industry have increased. “Five years ago, localization was roughly 30%. Currently, around 60% is localized. One year down the road, it will be 80-90%-plus level,” said Menon.