India’s app economy surges, but global platforms dominate the profits

India’s mobile app market is seeing record revenue growth, with in-app purchases exceeding $300 million in the first quarter, representing a 33% year-over-year increase, according to Sensor Tower. However, a significant portion of this spending continues to flow toward global platforms rather than domestic apps.

Non-gaming applications were the primary growth engine during Q1, generating more than $200 million in in-app purchase revenue. This segment grew 44% year-over-year and increased its overall share of total spending, Sensor Tower noted in its report. Key contributors included utilities, video streaming services, and generative AI applications.

This growth reflects a broader transformation in India’s app ecosystem. Annual in-app purchase revenue has increased from $520 million in 2021 to over $1 billion in 2025 and is projected to reach $1.25 billion this year, according to Sensor Tower. While total downloads have stabilised at approximately 25 billion per year, user engagement continues to rise, indicating that consumers are spending more time in apps and are increasingly willing to pay for digital services.

Despite this expansion, global companies continue to dominate revenue capture. Platforms such as Google One, Facebook, ChatGPT, and YouTube ranked among the highest earners in the first quarter. Domestic players performed better in certain categories, particularly video streaming, where JioHotstar and Sony LIV secured strong positions.

A similar pattern appears in download rankings. ChatGPT, Instagram, and the Chinese short-drama platform FreeReels led installations, followed by Indian apps including Story TV, JioHotstar, and Meesho.

According to Sensor Tower principal market insights manager Donny Kristianto, India’s app economy is transitioning from a download-heavy market to a more monetisation-focused ecosystem as digital usage deepens and payment adoption increases.

However, India still lags behind other regions in revenue per user. The market generates approximately $0.03 per download, compared with more than $0.20 per download in Southeast Asia and Latin America, according to Sensor Tower data.

Spending remains concentrated in a few established categories. Productivity tools, social media platforms, and video streaming services dominate the top revenue charts. Video streaming alone accounts for roughly half of the top 10 revenue-generating apps, highlighting its strong monetisation power.

At the same time, emerging categories are reshaping growth trends. Generative AI apps recorded a 69% year-over-year increase in downloads, with ChatGPT ranking among the top applications in both installs and revenue. India remains ChatGPT’s largest user market, while other AI tools are also gaining traction.

Short drama apps are expanding even faster, with downloads increasing by more than 400%, led by platforms such as FreeReels. These trends indicate that while India’s app economy is still in an early monetisation phase, new content formats and AI-driven services are steadily expanding what users are willing to pay for.