As Indian consumers shift from merely downloading apps to actively paying for services, the country is rapidly transforming into a monetisation economy, showing significant growth potential in comparison to other emerging markets.
Indian users may finally be paying up for app-based services, and the country is evolving from being the world’s largest mobile app downloads market into a market that also pays for the services, recent data from market intelligence firm Sensor Tower show.Driven by AI subscriptions, video streaming and digital services, India’s mobile app market reached a record $345 million in Q2 2026 (April-June 2026), up 35 per cent year-on-year from the same quarter last year. Of this, non-gaming revenue stood at nearly $240 million, and surged more than 50 per cent y-o-y.Sensor Tower’s analysis of app market takes into account estimated in-app purchase (IAP) revenue from Google Play and the App Store, excluding advertising revenue and revenue from third-party Android app stores.Analysts suggest that while the quarterly revenue size is smaller than developed markets like the US, South Korea and Japan, the growth rate is higher than what other peer markets like Mexico and Brazil have seen in recent quarters.Pricing correctlyVikas Chawla, Co-founder of digital marketing firm Social Beat, said that app revenue has increased, and is coming from AI and entertainment. “UPI reduced friction. Global players have started pricing India correctly. Pricing, especially for AI, finally came down to Indian levels. ₹19 for the next episode, weekly AI tiers instead of annual plans, and such, “ he said. He noted that much of the acceleration is coming from AI with ChatGPT and Claude took roughly 83 per cent of India’s AI app revenue.However, Chawla points out that ad revenue and third-party Android stores, which Sensor Tower does not track, are where most Indian apps actually earn.“India is transitioning from being a download economy to a monetisation economy,” marketing consultant Shubho Sengupta said. AI chatbots like ChatGPT and Claude in Top 5 in revenue terms suggests that Indians have taken to productivity through AI tools in a big way, he added.Video entertainment accounted for half of the top 10 apps of Q2 in India by revenue. Amazon Prime Video (7th), and homegrown platform Jio HotStar (10th spot) were in the top 10 by revenue.Among generative AI apps, Claude emerged as one of the fastest-growing monetisation stories. ChatGPT was in second spot by revenue, and Claude was in fifth spot.“Revenue [of Claude] reached a record high in Q2, increasing more than 19-fold year over year, highlighting the growing willingness of Indian users to pay for premium AI services,” Eve Chen, Insights Analyst, Sensor Tower, said.Top app by revenueInterestingly, Google One, a paid subscription service that expands cloud storage, was the top app by revenue in Q2, indicating more people paying for storage as digital content use grows and Google too curbs free storage.Video streaming platforms also continued to grow monetisation. Crunchyroll, a platform focused on streaming anime shows, recorded its highest quarterly revenue in India. YouTube was at 4th spot in the quarter’s tally, based on revenue.Meanwhile, India’s mobile game revenue exceeded $106 million, up 3.7 per cent quarter-on-quarter in Q2 2026, bucking the global trend as worldwide mobile game revenue declined 6.2 per cent.In terms of top downloads in Q2 2026, generative AI, entertainment and local services again led the chart. ChatGPT ranked No 1 by downloads, while JioHotstar, Blinkit and Rapido also ranked among the country’s top downloaded apps, highlighting the momentum of these fast-growing categories. Entertainment platforms also continued to gain momentum in India. Short drama app Story TV was the only short drama app in India’s Top 10 download ranking in Q2 2026 while reaching a record-high MAU in June, Sensor Tower said.Published on August 4, 2026
