India’s mobile app market is generating record revenue, with in-app purchases crossing $300 million in the first quarter, up 33% year-over-year, according to Sensor Tower — but much of that spending is flowing to global platforms.

Non-gaming apps were the main driver of growth in Q1, generating over $200 million in in-app purchase revenue — rising 44% year-over-year and increasing their share of overall spending, Sensor Tower said in its report. The gains were led by categories including utilities, video streaming, and generative AI.

The progress reflects a broader shift in India’s app market, where 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, pointing to 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 SonyLIV ranking highly. A similar pattern emerged in downloads, where ChatGPT, Instagram, and the Chinese short-drama app FreeReels led the market, followed by Indian apps including Story TV, JioHotstar, and Meesho.

India’s app market has matured on the download side, but monetization is strengthening as usage deepens and digital payment habits become more embedded, Donny Kristianto, principal market insights manager at Sensor Tower, said unknown.

Even so, shifts in user demand suggest room for further growth. 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.