India’s AI Boom: A Turning Point for Tech Giants
In the world of artificial intelligence (AI), India is fast becoming a pivotal player. With the world’s fourth-largest economy, the nation is a potential gold mine for tech giants striving to convert their free promotions into a sizeable base of paying subscribers. The country’s robust digital economy, home to over a billion internet users and some 700 million smartphone owners, presents an opportunity that is too significant to ignore. The full story can be read here.
India: A Global Leader in AI Adoption
According to Sensor Tower, a reputable market research firm, India surpassed the United States to become the largest market for generative AI app downloads in 2025. An impressive 207% year-on-year increase solidified India’s leading position in the global AI landscape.
Efforts to Boost AI Adoption
Companies like OpenAI, Google, and Perplexity have played a significant role in this growth. They have expanded their free premium offerings to accelerate user growth in India’s price-sensitive market. This strategic move is a clear endorsement of India’s mission to become a global hub for artificial intelligence. Evidence of this was seen at a major AI summit held in New Delhi, where industry leaders such as OpenAI’s Sam Altman, Anthropic’s Dario Amodei, and Alphabet CEO Sundar Pichai were in attendance.
From Free Promotions to Paying Subscribers
However, the phase of free promotions appears to be waning. Perplexity recently ended its bundled Pro offering with Indian telco Airtel, and OpenAI’s free ChatGPT Go access is no longer available in India. These developments suggest a shift in strategy, setting the stage for a real test of user conversion to paid subscriptions.
Revenue vs Downloads: The Monetization Challenge
Despite the strong growth in downloads, India accounts for just about 1% of AI app revenue, according to data from Sensor Tower. This, despite the fact that the country represents about 20% of all global GenAI app downloads. This highlights the challenge of monetizing in one of the fastest-growing markets for AI.
AI App Adoption Trends
The adoption of GenAI apps in India has seen a significant acceleration throughout 2025. However, the rise in usage has not fully translated into increased revenue. For instance, AI app in-app purchases declined in November and December 2025, with ChatGPT’s revenue falling even more sharply.
Photo credit:Sensor tower
Despite the revenue dip, ChatGPT still generates over 60% of GenAI in-app revenue in India. This means that any changes in its pricing strategy can significantly impact the overall market performance.
Driving Factors Behind AI Adoption
Sensor Tower attributes the surge in GenAI app adoption in India to new product launches, upgrades to major chatbots, and a viral interest in AI-generated content. Platforms such as DeepSeek, Grok, and Meta AI, and chatbots like ChatGPT, Gemini, Claude, and Perplexity were all instrumental in this growth.
The User Base and Market Dominance
In 2025, India accounted for about 19% of the global user base of leading AI assistant apps, surpassing the US, which had a 10% share. ChatGPT continues to dominate the Indian market with monthly active users, and OpenAI’s CEO reported that the chatbot now has more than 100 million weekly active users in India.
Strategies for Long-Term Customer Retention
AI firms are cognizant of the value-conscious nature of the Indian market. Their strategy is to drive early user adoption and engagement, hoping that this will lead to stronger long-term retention once free access periods expire. However, the challenge of converting rapid user adoption into sustainable revenue remains. Google, OpenAI, and Perplexity did not respond to requests for comment on this matter.
