Why ACs Are Getting Expensive in India (2026)
Prices have climbed 15-25% in two years. Here's what's driving the increase and when it might reverse.
If you've been shopping for an AC recently, you've noticed: prices are up. A 1.5 ton 5-star inverter that cost ₹35,000 in 2024 now starts at ₹42,000. Even budget 3-star models have crossed ₹30,000.
This isn't just inflation. A combination of regulatory changes, raw material costs, and shifting consumer demand is reshaping the Indian AC market. Understanding why helps you decide whether to buy now or wait.
The BEE Rating Overhaul
Every few years, the Bureau of Energy Efficiency (BEE) tightens the criteria for star ratings. What qualified as 5-star in 2022 might only be 3-star under 2025-26 norms. This forces manufacturers to use better compressors, more efficient heat exchangers, and improved insulation — all of which cost more.
The latest revision (effective from BEE's 2025-26 cycle) raised the minimum ISEER for 5-star from 4.50 to 4.65. Models that barely made the cut before now need hardware upgrades to retain their rating.
A "5-star AC" today is genuinely more efficient than a 5-star from 2023. You're paying more upfront but getting a better product that saves more on electricity. The label is the same, but the standard behind it has moved.
Copper Prices Are at a 10-Year High
Copper is used in condenser coils, refrigerant piping, and electrical wiring inside ACs. Global copper prices have surged from ~₹600/kg in 2022 to over ₹850/kg in early 2026 — driven by EV demand, green energy infrastructure, and supply constraints.
A single split AC uses 3-5 kg of copper. At ₹250/kg higher, that alone adds ₹750-1,250 to manufacturing costs. Brands either absorb this (shrinking margins) or pass it to consumers (higher MRP).
Some brands — notably LG — have switched to aluminium condensers to keep prices competitive. This works but reduces durability, especially in humid/coastal climates.
Copper vs aluminium — does it matter?
Our buying guide explains when copper is worth the premium and when aluminium is perfectly fine.
Read the AC Buying Guide→The R-32 Refrigerant Transition
India has been phasing out R-22 and R-410A refrigerants in favour of R-32, which has a lower global warming potential. R-32 itself isn't more expensive, but the redesigned compressors and components needed to handle it efficiently do add cost.
The upside: R-32 ACs are 10-15% more energy efficient than R-22 models and use less refrigerant per unit. The transition is nearly complete — virtually all new ACs in 2026 use R-32.
GST and Import Duty Changes
ACs attract 28% GST — the highest slab — plus cess on some components. Import duties on compressor parts and electronic control boards have also been revised upward as part of the PLI (Production-Linked Incentive) scheme to promote domestic manufacturing.
While the PLI scheme will reduce costs in the long run (as domestic manufacturing scales up), the short-term effect is higher prices. Brands that import key components — which is most of them — face higher input costs that flow through to retail prices.
Should You Buy Now or Wait?
The factors driving price increases — BEE norms, copper costs, component localisation — are structural, not cyclical. Prices are unlikely to drop back to 2023 levels. However, there are windows of opportunity:
- Off-season (October–February): Dealers clear inventory with ₹2,000-5,000 discounts. Best time to buy if you can wait.
- Sale events (Amazon/Flipkart): Genuine discounts of 10-20% during Republic Day, Summer Sale, and Great Indian Festival.
- Last year's models: When new models launch (January-March), previous models get clearance pricing. Performance difference is often negligible.
If you need an AC now, buy during the next sale event. If you can wait, October-November typically offers the best prices.
Ready to pick an AC?
See our scored rankings of the best 1.5 ton split ACs currently available in India.
View Top 5 ACs for 2026→Key Takeaways
- AC prices have risen 15-25% since 2024 due to stricter BEE norms, copper costs, and import duties
- Today's 5-star ACs are genuinely better than 2023 models — you're paying more for a better product
- Prices are unlikely to drop back to 2023 levels — these are structural increases, not temporary
- Best time to buy: off-season (Oct-Feb) or during major sale events for 10-20% savings