India’s app market matures as monetization begins to climb

India’s mobile app market is experiencing a significant shift in how it generates revenue. According to data from market intelligence firm Sensor Tower, in-app purchases in India crossed $300 million in the first quarter, representing a 33% year-over-year increase. While the market has historically been known for high download volumes rather than high spending, non-gaming apps emerged as the main driver of growth in Q1. These non-gaming applications generated $200 million in in-app purchase revenue, marking a 44% year-over-year rise.

Key growth indicators from the Sensor Tower report highlight this transition:

• Overall Q1 spending: In-app purchases reached $300 million, up 33% year-over-year.
• Non-gaming revenue: Non-gaming apps generated $200 million in Q1, a 44% year-over-year increase.
• Long-term revenue trajectory: Annual in-app purchase revenue rose from $520 million in 2021 to more than $1 billion in 2025, and is projected to reach $1.25 billion this year.
• Emerging categories: Downloads for generative AI apps grew 69% year-over-year, while short-drama platform downloads increased by more than 400%.

This revenue growth comes even as annual app downloads have stabilized at around 25 billion. The gap between download volume and actual spending highlights the unique characteristics of the market. “India’s app market has matured on the download side, but monetization is strengthening as usage deepens and digital payment habits become more embedded,” said Donny Kristianto, principal market insights manager at Sensor Tower.

Despite these gains, India remains a relatively low-spending market on a per-user basis. The country generates about $0.03 in revenue per download. By comparison, developers in Southeast Asia and Latin America see more than $0.20 in revenue per download.

The monetization that does occur is heavily concentrated. Global platforms continue to capture the majority of this spending, with Google One, Facebook, ChatGPT, and YouTube ranking as the top-earning global platforms. Domestic players are more prominent in specific sectors like video streaming, where JioHotstar and Sony LIV are among the top revenue-generating apps. Video streaming overall accounts for about half of the top 10 revenue-generating apps in the country. In downloads, global apps like ChatGPT, Instagram, and the short-drama app FreeReels led the market, alongside domestic apps such as Story TV, JioHotstar, and Meesho.

Why it matters

India’s mobile app market is seeing record revenue growth, yet global platforms are capturing the majority of this spending, highlighting a disparity between user engagement and domestic monetization.