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AC Prices to Jump 7-8% from 2026 Due to New Star Rating Norms

Consumers may face a 7-8% price increase on new room air conditioner models starting January 2026, driven by new energy efficiency norms and persistent commodity inflation. The report notes strong pre-buying activity as dealers stock up on existing models before the new rules take effect. After a volatile 2025 marked by adverse weather and demand issues, the industry outlook for 2026 is positive with expected volume growth of 20-22%. However, this recovery for manufacturers will likely come at a higher cost for buyers of the latest compliant models.

Key Points: AC Prices to Rise 7-8% in 2026 with New Star Rating Norms

  • Price hike driven by new star-rating norms
  • Commodity inflation also a factor
  • Strong pre-buying of old models reported
  • Industry expects 20-22% volume growth in 2026
  • 2025 was a challenging year for the sector
2 min read

Air conditioners price likely to rise 7-8% this season due to new star rating norms: Report

New air conditioner models may cost 7-8% more from Jan 2026 due to new energy efficiency norms and commodity inflation, a report states.

"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 - Equirus Report"

New Delhi, January 12

Consumers planning to purchase room air conditioners 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.

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.

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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Reader Comments

S
Sarah B
While price hikes are never welcome, if the new star ratings lead to genuinely more energy-efficient models, it could save money on electricity bills in the long run. We need to look at total cost of ownership.
P
Priya S
My parents in Chennai really need a new AC before summer hits. Looks like we have to buy now in December-January itself. This "pre-buying" the article mentions is so real!
A
Aman W
The timing is terrible. With summers getting hotter every year, AC is not a luxury but a necessity for health, especially for elderly and children. Government should reconsider or provide some subsidy.
K
Karthik V
Respectfully, I have to criticize the constant "commodity inflation" excuse. Companies' profits have been high, and now they're using new norms to justify another price hike. Margins seem to be the priority, not the consumer.
N
Nisha Z
This is why we Indians wait for the big sale festivals like Diwali or Amazon Great Indian Festival. No choice now but to plan major purchases around discounts. 🛒

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