Archive · 30 Sep 2026
AC Demand Expected to Rebound in FY27 on Stronger Summer
Air-conditioner sales in India fell in FY2026 because the summer was not as hot and there was unusual rain.
Experts expect sales to improve in FY2027 because a stronger summer is forecast.
They estimate that 12–14% more air conditioners will be sold.
Sales already grew about 15% in the first quarter of FY2027 compared with the same period a year earlier.
However, companies are earning less profit because copper, aluminium and other costs increased.
New energy-efficiency rules and a weaker rupee also raised costs.
India’s factories are expected to make more air conditioners and parts locally.
This could help the industry depend less on imports in the coming years.
India’s room air-conditioner industry is projected to grow 12–14% in FY2027, reaching 12.6–12.9 million units.
FY2026 volumes declined an estimated 10–12% because of unseasonal rainfall and weaker heat waves.
Q1 FY2027 volumes rose about 15% year over year, supported by stronger summer conditions and a low base.
Industry profitability remained under pressure from higher input costs, energy-efficiency rules and rupee depreciation.
Manufacturers plan Rs. 4,500–5,000 crore of capex in FY2027–FY2028, expanding capacity and domestic component production.
- Who
- India’s room air-conditioner industry, manufacturers and ICRA.
- What
- The industry is expected to recover in FY2027 with 12–14% volume growth after a decline in FY2026.
- When
- The forecast covers FY2027; capacity and investment projections extend through FY2028 and CY2030.
- Where
- India.
- Why
- A stronger summer, low AC penetration, rising disposable incomes and urbanisation are expected to support demand.
- FY2027 volume forecast
- 12.6–12.9 million room air-conditioner units
- FY2027 growth forecast
- 12–14% volume growth
- FY2026 performance
- Estimated 10–12% volume decline to 11.1–11.5 million units
- Q1 FY2027 growth
- Approximately 15% year over year
- Current manufacturing capacity
- 28–30 million units annually
- Planned FY2027–FY2028 capex
- Rs. 4,500–5,000 crore
- Projected indigenisation by FY2028
- 70–75%, compared with 60–65% currently