India's mobile app market generated record revenue in the first quarter, with in-app purchases reaching $300 million, a 33% year-over-year increase, according to Sensor Tower.
The growth was driven by non-gaming apps, which generated over $200 million in in-app purchase revenue, a 44% year-over-year increase and a rise in their share of overall spending. Categories such as utilities, video streaming, and generative AI led the gains.
Annual in-app purchase revenue has risen from $520 million in 2021 to more than $1 billion in 2025 and is projected to reach $1.25 billion this year, per Sensor Tower. While downloads have stabilized at around 25 billion a year, time spent on apps continues to grow, indicating deeper engagement and a greater willingness among users to pay for digital services.
Much of India's spending in Q1 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 Sony LIV ranking highly.
Despite the gains, India remains a relatively low-spending market, generating about $0.03 in revenue per download, compared with more than $0.20 in Southeast Asia and Latin America, Sensor Tower data showed.
New categories are driving growth in India's mobile app market, but spending remains concentrated in mature segments such as productivity, social media, and video streaming apps, which dominate the top rankings. Video streaming alone accounts for about half of the top 10 revenue-generating apps, underlining its outsized monetization power.
Generative AI apps saw downloads rise 69% year-over-year, with ChatGPT ranking among the top apps by both installs and revenue. India has long been ChatGPT's largest market by users, while other AI apps are also gaining ground.
Short drama platforms are growing even faster, with downloads up more than 400%, led by apps like FreeReels. The trend suggests India's app market is still early in its monetization journey, even as new categories expand what users are willing to pay for.