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Google Launches AI-Driven Marketing Tools in India After Digital Ad Tax Repeal

Cansin Cengiz

10 Jul 2025 — 2 min read

Google Expands AI Marketing Suite to India After Digital Ad Tax Ends

Google has officially launched its suite of AI-powered advertising tools in India, following the recent repeal of the country's 6% digital ad levy, commonly known as the “Google tax.” This strategic move aims to tap into India’s rapidly growing digital advertising sector, which is forecasted to exceed $7 billion by the end of 2025.

Why the Timing Matters

The Indian government’s decision to scrap the digital ad tax in April 2025 removed a significant barrier for global tech firms. This tax had previously raised trade concerns and was criticized as being "discriminatory and unreasonable" because it exempted domestic companies. Its removal has now made India a more attractive market for global giants such as Google, Meta, and Amazon.

Key AI Tools Rolled Out

Generated for You: Integrated into Product Studio, this tool uses AI to spot content opportunities within shopping catalogs and automatically creates images and videos. Merchants can use or publish this content directly across Google platforms.
Smart Bidding Exploration: An opt-in feature in search campaigns, leveraging AI to identify qualified leads that merchants might otherwise miss. It builds on Google’s existing Smart Bidding technology.
Agentic Capabilities: New features in Google Ads and Analytics allow AI-driven automation of campaign optimization by learning from datasets, landing pages, and real-time performance data.
AI Max for Search Campaigns: Enhances ad performance by analyzing landing pages, existing ads, and keyword lists to discover high-value search queries.

Real Results from Early Adopters

Indian electronics marketplace Cashify reported a 15% increase in conversions and a 12% reduction in customer acquisition costs during early trials of AI Max, according to Google.

New Ad Formats and YouTube Integration

Ads will soon appear in AI Overviews for Indian users later this year.
Shoppable connected TV ads and YouTube’s interactive product feeds are now live, making it easier for viewers to buy directly from their screens.
YouTube’s masthead on mobile devices will also support ads in India, expanding reach for brands.

Image Credits: Google

India’s Digital Ad Market: Fast-Growing and Critical

India is the world’s second-largest internet market, and digital ad spending is growing at over 20% year-over-year. YouTube, especially on connected TVs, has become the top streaming service in the country, while YouTube Shorts continues to engage billions of users. A recent survey found that 87% of Indian consumers watch YouTube or Shorts as part of their shopping journey.

In the fiscal year 2024, Google’s gross ad revenue in India jumped 11% to ₹312.21 billion ($3.6 billion), with net advertising revenue rising 18% to ₹27.43 billion ($320 million).

What This Means for Indian Businesses

The arrival of Google’s latest AI marketing tools gives Indian marketers access to advanced automation, better targeting, and new ad formats. As digital adoption accelerates, these innovations could reshape how businesses reach and convert customers in a highly competitive market.