Modern Delhi – A pivotal moment is unfolding in India’s artificial intelligence boom as tech giants begin to curtail free access to premium AI services, testing the willingness of the country’s vast user base to convert into paying subscribers. The shift comes after a period of aggressive promotional offers designed to capture market share in what has rapidly become the world’s largest market for generative AI app downloads.
India surpassed the United States in 2025 as the leading market for generative AI app installations, experiencing a 207% year-over-year increase, according to market intelligence firm Sensor Tower. Companies like OpenAI, Google, and Perplexity responded by extending free premium access, aiming to capitalize on the price sensitivity of the Indian market and establish a strong foothold in a strategically important region.
The recent AI summit held in New Delhi, attended by industry leaders including OpenAI’s Sam Altman, Anthropic’s Dario Amodei, and Alphabet CEO Sundar Pichai, underscored India’s growing significance in the global AI landscape. However, the tide is now turning. Perplexity ended its bundled Pro offer with Indian telecom provider Airtel in January, and OpenAI’s free ChatGPT Travel access in India has also been discontinued, signaling a move towards monetization.
Despite the explosive growth in downloads, India currently contributes a disproportionately small share of revenue from AI applications. Sensor Tower data indicates that the country accounts for approximately 1% of in-app purchases, despite generating roughly 20% of global GenAI app downloads. This disparity highlights the challenges of converting a large user base into a sustainable revenue stream.
The surge in AI app adoption throughout 2025 peaked in September and October, with year-over-year growth rates of 320% and 260% respectively. However, revenue gains did not keep pace with usage. In November and December 2025, in-app purchase revenue for AI applications in India declined by 22% and 18% month-over-month. The launch of a sub-$5 ChatGPT Go access tier in November contributed to a sharp decline in ChatGPT revenue – down 33% and 32% over the same period – demonstrating the immediate impact of promotional pricing.
ChatGPT currently dominates the Indian market, accounting for more than 60% of GenAI in-app revenue. This market leadership means that any adjustments to its pricing strategy will have a significant impact on the overall performance of the sector. Sensor Tower’s analysis also points to the role of new entrants like DeepSeek and Grok, alongside improvements to established platforms such as ChatGPT, Gemini, Claude, and Perplexity, in driving adoption. The proliferation of AI-generated content, particularly in content creation and editing apps – seven of the top 20 downloaded GenAI apps in India in 2025 – also fueled growth.
India’s user base is expanding rapidly, representing approximately 19% of the global user base of leading AI assistant apps in 2025, compared to 10% in the United States. While ChatGPT remains the most popular AI assistant in India by monthly active users, competitors like Google’s Gemini and Perplexity are gaining traction following their promotional offers. OpenAI CEO recently stated that ChatGPT has surpassed 100 million weekly active users in India.
Sneha Pandey, an insights analyst at Sensor Tower, explained that the promotional push in India reflects a broader strategy to lower pricing barriers in a value-conscious market, with the expectation that initial user engagement will translate into long-term retention once free access expires. India’s appeal lies in its massive digital base, boasting over a billion internet users and around 700 million smartphone owners.
However, user engagement in India still lags behind more mature markets. In 2025, users of leading AI chatbot apps in the U.S. Spent approximately 21% more time per week on the apps and logged 17% more sessions on average compared to their counterparts in India. Pandey suggests that sustained engagement will be crucial for improving AI in-app revenues, and that pricing pressure is likely to remain high due to the country’s young and value-conscious user base. Lower-cost tiers, telecom bundles, and micro-transaction models may be essential for long-term retention.
As of January 2026, ChatGPT held a commanding lead in the Indian market with 180 million monthly active users, followed by Google’s Gemini with 118 million, Perplexity with 19 million, and Meta AI with 12 million. These figures highlight both the immense potential of the Indian AI market and the ongoing challenge for companies to convert rapid user adoption into consistent revenue. Google, OpenAI, and Perplexity have not yet responded to requests for comment.
