India’s app market is booming — but global platforms are capturing most of the gains

India’s mobile app market is generating record revenue, with in-app purchases crossing the $300 million mark in the first quarter, up 33% year-over-year, according to Sensor Tower – but much of that spending is flowing to global platforms.

Non-gaming apps were the main driver of growth in the first quarter, generating more than $200 million in in-app purchase revenue – up 44% year-over-year and a larger share of total spend, according to Sensor Tower said in his report. Gains were led by categories such as utilities, video streaming and generative AI.

The progress reflects a broader shift in the Indian app market, where annual revenue from in-app purchases has increased from $520 million in 2021 to more than 1 billion dollars by 2025 and is expected to reach $1.25 billion per sensor tower this year. While the number of downloads has stabilized at around 25 billion per year, time spent on apps continues to grow, indicating greater engagement and a greater willingness among users to pay for digital services.

A large portion of India’s spending in the first quarter was captured by global platforms, with Google One, Facebook, ChatGPT and YouTube among the top earners. Domestic players were more prominent in video streaming, with JioHotstar and SonyLIV ranking highly. A similar pattern emerged in downloads, with ChatGPT, Instagram and Chinese short drama app FreeReels leading the market, followed by Indian apps like Story TV, JioHotstar and Meesho.

The Indian app market has matured on the download side, but monetization is getting stronger as usage deepens and digital payment habits become more embedded, Donny Kristianto, chief market insights manager at Sensor Tower, told TechCrunch.

Despite the gains, India remains a relatively low-spending market, generating about $0.03 in revenue per download, compared to more than $0.20 in Southeast Asia and Latin America, according to Sensor Tower data shared with TechCrunch.

While newer categories are driving growth in the Indian mobile app market, spending remains concentrated in a handful of mature segments, particularly productivity, social media and video streaming apps, which dominate the top spots. Video streaming alone accounts for about half of the top 10 revenue-generating apps, underscoring the outsized power of monetization, the data shows.

Yet shifts in user demand indicate room for further growth. Generative AI apps saw downloads increase 69% year-over-year, with ChatGPT among the top apps in terms of both installs and revenue. India has long been ChatGPT’s largest market in terms of users, with other AI apps also gaining traction.

Short drama platforms are growing even faster, with downloads up more than 400%, led by apps like FreeReels. The trend suggests that the Indian app market is still in the early stages of monetization, even as new categories expand that users are willing to pay for.