Why AC makers in India are worried ahead of summer
22 Mar 2026

Unseasonal rains across India are posing a challenge to air conditioner (AC) manufacturers.

The unusual weather pattern is likely to affect early summer demand, a peak sales period for cooling products.

Adding to the industry's woes are price hikes due to geopolitical tensions in West Asia and rising raw material costs like plastics.

Production cuts looming
Cost concerns

The price of plastics has gone up, which could also push up the prices of other large appliances like washing machines by 10-12%.

The industry is also facing a reduction in LPG gas supply, which is affecting production.

Haier India's President N S Satish warned that if this trend continues, there could be a 20-30% production cut just before peak month for ACs.

Potential downgrading in product segments
Cost impact

Satish also expressed his concerns over the rising price of plastic, a key component in large appliances like washing machines and refrigerators.

He said that in segments such as washing machines, plastics account for 20% of material costs.

"We will have to increase price by 10-12%," he added.

This could even lead to downgrading within the segment where customers opt for lower-capacity, lower-quality products to offset increased costs.

Hope for demand uptick in April
Future outlook

Despite the current challenges, AC manufacturers are hopeful for an uptick in demand as temperatures rise in April.

Kamal Nandi, Business Head and EVP of Appliances Business at Godrej Enterprises Group, said he expects the situation to normalize by then.

However, he also expressed concerns over a potential second price hike due to rising oil and plastic prices as well as increasing freight costs.

Thin margins and stiff competition
Market dynamics

Blue Star's MD B Thiagarajan also confirmed that plastic prices are rising along with other input materials.

He said the industry, which is already operating on thin margins, will have to pass these costs onto consumers.

Experts predict stiff competition in the Indian AC market this year as manufacturers try to gain market share after negative growth in 2025.