India's artificial intelligence market is poised at a critical juncture, as major technology companies transition from extensive free promotions to strategies aimed at converting its vast user base into paid subscribers. In 2025, India solidified its position as the world's largest market for generative AI app downloads, outperforming the U.S. with an astounding 207% year-over-year increase in installs, according to data from market intelligence firm Sensor Tower.

To accelerate user growth within India's price-sensitive landscape, leading AI firms such as OpenAI, Google, and Perplexity aggressively rolled out extended free premium offers. This push for adoption aligns with India's broader ambition to establish itself as a global artificial intelligence hub. This aspiration was underscored by a significant AI summit recently held in New Delhi, which saw the participation of prominent industry figures including OpenAI's Sam Altman, Anthropic's Dario Amodei, and Alphabet CEO Sundar Pichai, highlighting India's increasing influence in the global AI race.

However, this era of widespread free access is now drawing to a close. Perplexity concluded its bundled Pro offer with Indian telecom provider Airtel in January, while OpenAI's free ChatGPT Go access in India is no longer available. This strategic shift is expected to provide a clearer assessment of the conversion rates from free users to paying subscribers, marking a significant turning point for monetization strategies in the region.

Despite the robust download growth, India faces a substantial monetization challenge. The country accounts for approximately 20% of global generative AI app downloads but contributes a disproportionately small share—only about 1%—of in-app purchase revenue, according to Sensor Tower data shared with TechCrunch. The surge in usage in 2025, which saw downloads peak in September and October with year-over-year growth rates of about 320% and 260% respectively, did not fully translate into revenue gains. In fact, AI app in-app purchase revenue in India declined by 22% and 18% month-over-month in November and December 2025, respectively. ChatGPT's revenue experienced an even sharper drop, falling 33% and 32% over the same period, following the November launch of its free sub-$5 ChatGPT Go access, demonstrating the immediate impact of aggressive promotional strategies.

ChatGPT remains a dominant force, commanding over 60% of generative AI in-app revenue in India, which means any adjustments to its pricing strategy will have a considerable effect on the overall market performance. Sensor Tower attributes the surge in GenAI app adoption in India last year not only to promotional efforts but also to a combination of new product launches—such as DeepSeek, Grok, and Meta AI—and significant upgrades to existing chatbots like ChatGPT, Gemini, Claude, and Perplexity. Furthermore, a viral interest in AI-generated content significantly fueled adoption, with content creation and editing tools comprising seven of the top twenty most downloaded GenAI apps in India in 2025.

The growth in the user base has been equally impressive. In 2025, India constituted approximately 19% of the global user base for leading AI assistant applications, surpassing the U.S., which stood at 10%. ChatGPT leads the Indian market in monthly active users, though competitors like Google's Gemini and Perplexity have also experienced rapid expansion following their respective promotional campaigns. Earlier Sensor Tower data confirmed ChatGPT as the most downloaded GenAI app both in India and globally in 2025, with OpenAI's CEO stating that the chatbot now serves over 100 million weekly active users in India.

Sneha Pandey, an insights analyst at Sensor Tower, notes that the promotional strategy in India reflects a broader effort by AI firms to mitigate pricing friction in a highly value-conscious market. The underlying gamble is that early user adoption and strong engagement will convert into robust long-term retention once free access periods expire. India's immense digital foundation—with over a billion internet users and approximately 700 million smartphone owners—makes it an exceptionally promising market for AI services globally and a crucial arena for user acquisition.

However, user engagement in India still lags behind more mature markets. In 2025, users of leading AI chatbot apps in the U.S. spent about 21% more time per week on these applications and logged 17% more sessions on average compared to their Indian counterparts, according to Sensor Tower. Pandey suggests that while AI in-app revenues are likely to see meaningful but gradual improvement as users become more deeply integrated into these platforms, sustained engagement will be paramount. She also anticipates that pricing pressure in India will remain elevated due to the country's young and value-conscious user base, making lower-cost tiers, telecom bundles, and micro-transaction models vital for ensuring long-term retention.

Entering 2026, ChatGPT maintained its clear market leadership in India, boasting 180 million monthly active users in January, as per Sensor Tower. It was followed by Google’s Gemini with 118 million, Perplexity with 19 million, and Meta AI with 12 million. These figures underscore both the vast scale of India's AI opportunity and the growing challenge for companies to effectively translate rapid user adoption into sustainable revenue streams.