New Delhi, Dec 31 (PTI) Prices of cooling appliances such as room air conditioners and refrigerators may go up 5-10 per cent from January 1, 2026, as the new revised star rating from the Bureau of Energy Efficiency (BEE) comes into force.

This hike, which will be applicable from January 1, 2026, will almost offset the price advantage which the consumers have got from the GST reforms in September this year on room air-conditioners (RAC), where duty was slashed 10 per cent.

Besides the fall of the Indian rupee against the US dollar and global increase of copper prices is also putting pressure on manufacturers' margins.

Despite this, leading manufacturers such as Voltas, Daikin, Blue Star, and Godrej Appliances are unfazed and expect this to help to keep the carbon footprints lower.

The new 5-star AC under the new revised BEE norms is 10 per cent more energy efficient; however, it will also increase the prices by around 10 per cent, said Blue Star Managing Director B Thiagarajan.

"New 5-star is a new product itself, which in today's context, will be equivalent to 6 or 7-star. That new product, which will be introduced, has a price difference of around 10 per cent," he said.

After January 1, 2026, a 5-star of 2025 rating will be downgraded as 4-star. Similarly, a current 4-star as a 3-star and a current 3-star will be 2 star, with a price difference of 5 per cent.

Expressing a similar opinion, Godrej Enterprises Group Business Head & EVP at Appliances Business Kamal Nandi said the durables industry is getting affected by currency depreciation as well as adverse commodity costs and scheduled energy regime changeover from January, which cumulatively will lead to a significant cost increase in cooling categories, with RACs being most impacted.

"In the immediate context, energy regime changeover-linked price hike to the tune of 5-7 per cent for ACs and 3-5 per cent for refrigerators looks likely," said Nandi.

Voltas Senior Business Leader Jayant Balan said India's cooling industry is entering a transformative phase with the upcoming BEE star rating revision effective January 2026.

"These policy shifts are accelerating demand, as trade partners and consumers move early to secure current pricing and mitigate the average expected increase of 7-8 per cent on new inventory, noting that actual changes may differ based on specifications and product categories," he said.

Balan added that consumer behaviour is evolving rapidly in this environment.

Daikin Airconditioning India Chairman and Managing Director Kanwaljeet Jawa said from 2012 to 2024, this is the fifth time that energy labelling standards are going up.

"This industry has been supportive to the government for energy efficiency, which is a big challenge for the country. So, ever since they have taken this into sunrise, we all have been very supportive of these movements," he said.

The AC industry got GST benefits and had also seen an increase in sales. However, the industry is also committed towards sustainability as when the demand goes up, it is also required to balance the energy efficiency.

"Prices will definitely go up, not only because the BEE labelling standards are going up, but copper also has gone up, the raw material cost has been going up, the dollar against the rupee has depreciated," he said.

Asked whether the RAC prices will return to pre-GST reforms time, Jawa said, "It will be around that".

Besides, BEE has also made star-labelling mandatory on a host of appliances, including televisions, LPG gas stoves, cooling towers, and chillers from January 1. This will help customers make an informed choice and ensure standardisation.

It has put energy efficiency norms for air-conditioners stricter, with new requirements to achieve the highest 5-star rating. To meet the new norms, manufacturers are using more expensive components to meet the higher standards, leading to a price increase.

This also means 5-star rated RAC in 2025 are now rated lower as 4-star under the new system. PTI KRH TRB

Cooling appliance prices to rise as new star rating standards increase efficiency thresholds, prompting higher costs for ACs and refrigerators. Revised energy labelling standards effective January 1, 2026 raise performance thresholds and expand mandatory star labelling, requiring manufacturers to adopt costlier components to meet the stricter 5 star criteria. The change will reclassify many existing high rated cooling appliances to lower star levels, prompting industry estimates of price increases-around 10% for new top rated room air conditioners and 3-5% for refrigerators-driven by compliance costs alongside commodity and currency pressures.