India’s app market is booming, but global platforms capture most of the profits

India’s mobile app market is experiencing record revenues, with in-app purchases exceeding $300 million 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 primary driver of growth in the first quarter, generating more than $200 million in in-app purchase revenue, up 44% year-over-year and increasing their share of total spending, Sensor Tower said in a report. Categories such as utilities, video streaming, and generative AI led the rise.

This progress reflects broader changes in India’s app market, with annual revenue from in-app purchases expected to grow from $520 million in 2021 to more than $1 billion in 2025 and reach $1.25 billion this year, according to Sensor Tower. Although downloads have held steady at around 25 billion per year, the amount of time spent in apps continues to rise, demonstrating deeper user engagement and an increased willingness to pay for digital services.

Global platforms accounted for much of India’s spending in Q1, with Google One, Facebook, ChatGPT, and YouTube topping the list. Domestic players were more prominent in video streaming, with JioHotstar and SonyLIV ranking highly. A similar pattern was seen 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 is mature in terms of downloads, but monetization is strengthening as usage deepens and digital payment habits become more established, Donny Kristianto, principal market insights manager at Sensor Tower, told TechCrunch.

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

While new categories are driving growth in India’s mobile app market, spending remains concentrated in a few mature segments, particularly productivity, social media, and video streaming apps that dominate the top rankings. Video streaming alone accounts for about half of the top 10 revenue-generating apps, highlighting its extraordinary monetization power, the data showed.

Still, changes in user demand suggest room for further growth. Generated AI app downloads increased 69% year-over-year, and ChatGPT ranked among the top apps for both installs and revenue. India has long been the largest market for ChatGPT users, and other AI apps are also emerging.

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