The Turning Point of AI Adoption in India

Tech giants are approaching a critical juncture in their efforts to boost AI adoption in India. As companies wind down their free promotional offers, they aim to transform the world’s fourth-largest economy into a lucrative hub for paid subscribers.

Rapid Growth in Generative AI Downloads

In 2025, India emerged as the global leader in generative AI app downloads, according to market intelligence firm Sensor Tower. The country saw installs soar by 207% year-over-year, significantly outpacing the United States. This explosive growth underscores India’s potential as a key player in the AI landscape.

Leading tech companies, such as OpenAI, Google, and Perplexity, initiated extended free premium offers to capture user interest in this price-sensitive market. Notably, these developments coincided with a significant AI summit in New Delhi, attended by influential figures like OpenAI’s Sam Altman and Alphabet’s CEO Sundar Pichai. This event signaled India’s growing prominence in the global AI arena.

The End of Free Promotions

As of early 2026, major promotional strategies are phasing out. Perplexity ended its bundled Pro offer with Indian telecom company Airtel in January, while OpenAI has discontinued its free ChatGPT Go access in India. This shift is set to provide valuable insights into the percentage of new users that will transition to paid subscribers.

Despite India’s impressive download growth, the revenue generated by AI apps remains disproportionately low, making up roughly 1% of in-app purchases. This figure is particularly striking when considering that India accounted for about 20% of global generative AI app downloads, highlighting a significant monetization challenge in one of the industry’s most rapidly growing markets.

Trends in Generative AI App Adoption

Adoption of generative AI apps in India surged throughout 2025, peaking in September and October with year-over-year growth rates of approximately 320% and 260%. However, this increase in usage did not directly correlate to revenue gains. In late 2025, revenue from in-app purchases for AI apps in India declined by 22% and 18% in November and December, respectively. Notably, ChatGPT experienced a steeper revenue drop of 33% and 32% during the same period, following the introduction of free sub-$5 ChatGPT Go access.

Currently, ChatGPT holds more than 60% of generative AI in-app revenue in India, indicating that any pricing changes it implements could have significant ramifications for overall market performance.

Factors Driving Adoption

The increase in generative AI app downloads in India can be attributed to several factors, including new product launches, such as DeepSeek and Meta AI, alongside enhancements of established chatbots like ChatGPT and Google’s Gemini. The growing interest in AI-generated content also played a role, with content creation and editing tools representing seven of the 20 most downloaded generative AI apps in India in 2025.

User engagement has also seen remarkable exploitation; India constituted approximately 19% of the global user base for leading AI assistant apps in 2025, outpacing the U.S., which accounted for 10%. ChatGPT maintained its dominance in the Indian market with the highest number of monthly active users, although competitors like Google’s Gemini and Perplexity have also benefited from promotional strategies. Recently, OpenAI reported that ChatGPT now boasts over 100 million weekly active users in India.

A Strategic Approach to Monetization

The promotional efforts in India reflect a broader strategy by AI firms to alleviate pricing constraints in a market keen on value. Companies are betting that early user adoption will foster long-term retention, even after the free access periods end. As observed by Sneha Pandey, insights analyst at Sensor Tower, this approach could be crucial for companies seeking to maintain user interest.

India’s immense digital infrastructure plays a significant role in its attractiveness as an emerging AI market. With more than a billion internet users and around 700 million smartphone owners, India presents one of the largest potential markets for AI services globally.

Challenges Ahead: User Engagement

While the numbers indicate a growing user base, engagement levels in India still lag behind more developed markets. In 2025, weekly engagement rates for leading AI chatbot apps in the U.S. were about 21% higher than those in India, while the average number of sessions per user was 17% greater.

“AI in-app revenues are expected to see substantial but gradual improvements as users integrate more into these platforms, making sustained engagement crucial,” Pandey added.

Pricing pressures in India are likely to remain high, reflecting the young and value-sensitive user demographic. Thus, companies may have to rely on lower-cost tiers, Bundling with telecom services, and micro-transaction models as critical strategies for achieving long-term retention.

Market Landscape: Key Players

As 2026 unfolds, ChatGPT stands out as the clear leader in India, boasting 180 million monthly active users. Google’s Gemini follows with 118 million users, while Perplexity and Meta AI hold 19 million and 12 million, respectively. These figures underscore both the enormous potential for AI in India and the persistent challenge for firms to convert rapid user growth into sustained revenue.

With ongoing strategic adjustments and an increasing focus on market dynamics, tech giants are poised to navigate this evolving landscape. However, to capitalize on the opportunities available, they will need to address the monetization challenges inherent to such a diverse and expansive market.

In summary, while India showcases significant potential for generative AI, realizing that potential will demand innovative strategies and sustained engagement. As free promotional offers come to an end, the ability to convert users to paying subscribers will determine the future landscape of AI in India.

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Emmanuel Kesse

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