Hi Ravi,
So the good news here is that xray/pandas is actually always treats datetime64 arrays as timezone naive/UTC. All climatology calculations (resample, groupby, etc.) are all done in UTC.
Unfortunately, NumPy converts to datetimes to your local timezone when you print an array, and xray relies on numpy when we print a DataArray. This is a repeated source of confusion that I would like to definitely fix:
If you're interested, help putting together a PR would definitely be a appreciated.
Cheers,
Stephan