CHENNAI: India’s leading air conditioning and commercial refrigeration company Blue Star Limited said the ongoing West Asia conflict has not disrupted the production of air conditioners and refrigerators in the country so far, even as the industry prepares for possible supply disruptions in natural gas.
Speaking to reporters in Chennai, Managing Director B Thiagarajan said the company remains dependent on LNG and PNG supplies sourced largely from West Asia, but production has continued without interruption despite the government cutting gas supplies by half for industrial use.
“The ongoing war has not interrupted our production so far. We are highly dependent on LNG and PNG supplied from West Asia. We have received a notification from the government that supply will be cut by 50% as priority is being given to essential services such as restaurants, hotels and domestic consumption,” Thiagarajan said.
However, he cautioned that the broader geopolitical tensions could affect consumer sentiment during the peak summer season. “War-related sentiment could impact consumers. Therefore, we are cautious in celebrating the summer demand unlike last year. We have to wait and watch how the situation unfolds,” he said.
The company has launched its 2026 range of room air conditioners. The Indian AC market is currently estimated at 14–16 million units annually and is expected to expand to around 30 million units by 2030. Blue Star currently manufactures 1.2–1.5 million AC units a year and aims to scale this up to 8 million units by 2030.
To support expansion, the company has earmarked Rs 40 crore of capital expenditure for its Sri City factory, which began operations in 2022, and another Rs 40 crore for its Himachal Pradesh plant in the current calendar year. It is also investing Rs 70 crore in research and development.
On localisation of components, Thiagarajan said 60–65% value addition already happens in India, though key components such as compressors and semiconductors are still largely imported. Copper, too, continues to be sourced from overseas, although a domestic supply chain is gradually developing.
“It may take around 18 months for Indian-made compressors to enter the market. For now, Chinese manufacturers continue to expand their footprint despite import restrictions,” he said.
Blue Star is open to partnerships with Indian manufacturers to produce compressors domestically, provided sufficient scale is achieved. The company expects two or three Indian manufacturers to begin producing compressors locally by 2028, with potential demand of about 2.5 million units.
Thiagarajan also indicated that AC prices have risen 13–15%, of which around 8% has already been passed on to consumers in the current financial year. The remaining increase may be implemented gradually.
“Consumers are not yet feeling the price hike because dealers usually stock up in large quantities before price revisions. But those inventories will likely run out during peak summer. The real impact could be felt from the first week of May,” he said.
He added that volatility in the rupee-dollar exchange rate and rising fuel prices could further add to costs. Transportation accounts for around 4% of total cost, while commodity price increases alone have added about 8.5% to material costs, he said.