TL;DR
- Google has introduced its AI-driven advertising tools in India, following the repeal of the 6% digital ad “Google tax”
- New features include AI Max for Search Campaigns, Smart Bidding Exploration, and shoppable YouTube connected TV ads
- India’s digital ad market is forecast to grow over 20% in 2025, reaching nearly $7 billion
- Google’s AI tools support Hindi language campaigns and enable granular urban and rural audience targeting
- Early adopters like Cashify report significant improvements in conversion rates and cost efficiency
Google Enters Indian Market with Advanced AI Marketing Suite
Following the Indian government’s repeal of the controversial 6% digital advertisement tax in April 2025, Google swiftly expanded its AI-powered advertising toolkit into India’s burgeoning online market. This move comes as part of Google’s broader strategy to tap into one of the world’s largest internet user bases while easing compliance and cost barriers for global ad buyers.
The tax repeal, often referred to as the “Google tax,” had drawn criticism from the U.S. Trade Representative for being “discriminatory and unreasonable,” leading India to scrap it amid trade negotiations with the United States.
Key AI Marketing Tools Debuted in India
Google’s newly launched tools for Indian marketers include:
- Generated for You: An AI feature within Product Studio that analyzes shopping catalogs to generate relevant images and videos, streamlining content creation for merchants.
- Smart Bidding Exploration: An opt-in enhancement that leverages AI to discover new, qualified leads beyond typical bidding strategies.
- AI Max for Search Campaigns: A machine learning system that optimizes search ad performance by learning from brand assets, landing pages, and existing keywords.
These innovations are designed to boost efficiency and reduce guesswork in digital advertising, particularly for small and medium enterprises (SMEs) seeking scalable growth.
Success Story: Cashify Sees Boost With AI Max
Indian electronics resale platform Cashify implemented AI Max during early trials, reporting a 15% increase in conversions and a 12% reduction in customer acquisition costs. This case exemplifies the tangible benefits of AI-driven advertising in competitive markets.
Expanding YouTube Advertising Capabilities
YouTube’s advertising presence is also expanding with the introduction of:
- Shoppable connected TV (CTV) ads
- Mobile masthead ads tailored to Indian audiences
YouTube remains the most-watched streaming platform on Indian TVs and a dominant channel for short video content via YouTube Shorts, which has amassed trillions of views in the country. Notably, 87% of Indian shoppers use YouTube or Shorts during their purchasing journeys.
Localized Features and Enhanced Targeting
Google has integrated several India-specific features to optimize campaign performance:
- Support for Hindi language ads and AI tools
- Urban and rural audience segmentation at the state level for detailed media planning and reporting
These tools empower advertisers to tailor messaging and budget allocation with precision, reflecting India’s diverse demographic landscape.
India’s Rapidly Growing Digital Advertising Market
India’s digital ad market is projected to grow over 20% year-over-year in 2025, approaching a value of $7 billion, according to a recent Dentsu Digital Advertising report.
Google remains a key player in this growth, reporting:
- An 11% year-over-year increase in gross ad revenues for fiscal year 2024, reaching ₹312.21 billion ($3.6 billion)
- An 18% increase in net advertising revenue, hitting ₹27.43 billion ($320 million)
The Data
| Metric | Value | Source |
| India Digital Ad Market Size (2025) | Nearly $7 billion | Dentsu Digital Advertising Report |
| Google Gross Ad Revenue India (FY 2024) | ₹312.21 billion ($3.6 billion) | Google Financials |
| Google Net Ad Revenue India (FY 2024) | ₹27.43 billion ($320 million) | Google Financials |
| Conversion Increase Reported by Cashify | 15% | Google Case Study |
| Customer Acquisition Cost Reduction | 12% | Google Case Study |
