New Delhi, India — Google has officially launched its AI-driven marketing tools in India, following the government's recent repeal of its 6% digital advertising levy, widely referred to as the “Google tax.” The tax’s removal has made the Indian digital advertising market more appealing to global tech companies offering ad solutions, including Google, Meta, and Amazon.
India Removes Digital Ad Tax, Paving Way for Global Tech Expansion
The levy had drawn criticism from the U.S. Trade Representative, who labeled it “discriminatory and unreasonable” due to its exemption of domestic firms. Its removal significantly reduces the cost of doing business for global players such as Google, Meta, and Amazon in the Indian market.
New AI Tools Debut at Google’s First India Marketing Live Event
At the first-ever India edition of its Marketing Live event, Google introduced a suite of AI-powered advertising tools designed to optimize campaign performance for Indian marketers. Among the key offerings is “Generated for You”, a feature within Product Studio that uses artificial intelligence to scan product catalogs and generate images and videos that merchants can use across Google platforms.
Another significant addition is Smart Bidding Exploration, an opt-in feature that builds upon Google’s existing Smart Bidding. It leverages AI to uncover high-value leads that may not be captured by traditional campaign settings, thereby improving advertiser reach and efficiency.
Google also introduced agentic capabilities in Google Ads and Analytics. These adaptive AI systems analyze multiple inputs, such as campaign data, landing pages, and performance metrics, to automatically refine ad strategies and reduce manual guesswork.
AI Max and Early Success Stories
Further expanding its AI toolkit, Google launched AI Max for Search Campaigns, which learns from a brand’s keywords, ads, and landing pages to find more relevant and better-performing search queries. Indian electronics marketplace Cashify participated in early testing and reported a 15% increase in conversions and a 12% decrease in customer acquisition costs using AI Max.
Google also announced that ads will soon appear in AI Overviews in India, expanding the reach of advertising through Google’s AI-generated search summaries.
YouTube Advertising Deepens Market Penetration
As part of its broader strategy, Google has enhanced YouTube’s advertising infrastructure in India. The platform now includes shoppable Connected TV (CTV) ads and has expanded the YouTube mobile masthead to include promotional content within India.
YouTube has become India’s most-watched streaming service on television over the past year. According to Roma Datta Chobey, Managing Director of Digital Native Industries at Google India, 87% of Indian consumers use YouTube or Shorts as part of their shopping journey—highlighting the growing role of video in e-commerce.
Localized Tools and India’s Growing Digital Ad Market
To cater to regional advertisers, Google confirmed that all newly launched tools now support the Hindi language. Additionally, state-level filters for both urban and rural regions have been introduced, allowing advertisers to plan, target, and report with greater accuracy.
India remains one of Google’s most important markets, not only due to its vast user base but also because of its strong revenue performance. In FY 2024, Google’s gross ad revenue in India grew by 11% to ₹312.21 billion ($3.6 billion), while net ad revenue rose by 18% to ₹27.43 billion ($320 million).
Outlook: India Poised for Continued Digital Growth
India is such a thriving digital ecosystem. We have the largest number of users actively testing our products, which is why we’re bringing these innovations to India more rapidly.
With the Indian digital advertising sector projected to grow over 20% annually, reaching $7 billion by the end of 2025 (as per Dentsu’s Digital Advertising report), Google’s strategic expansion positions it at the forefront of a fast-evolving and competitive market.
The Bottom Line
India’s repeal of the digital ad tax has opened the door for global tech giants like Google to expand their footprint in the country, making it a more accessible and cost-effective market for AI-driven advertising and digital innovation.
