Google brings its AI-powered marketing tools to India after ‘Google tax’ repeal

Google has officially launched its advanced suite of AI-powered advertising tools in India, a strategic move that follows the recent repeal of the “Google tax.” These tools, which first debuted in the U.S. in May, are expected to significantly enhance the digital advertising landscape in the South Asian market, making it increasingly attractive for global tech firms.

The decision to expand Google’s AI marketing capabilities into India comes after the Indian government’s crucial move in March to scrap its 6% equalization levy on digital advertisements, effective from April. This levy, often dubbed the “Google tax,” had drawn criticism from the United States Trade Representative, which labeled it “discriminatory and unreasonable” due to its exemption of domestic companies. Its repeal is set to ease operational costs for major tech entities, including Google, Meta, and Amazon, fostering a more favorable environment for digital advertising growth.

During its local Marketing Live event, Google introduced several key AI-powered tools tailored for Indian marketers. Among these is “Generated for You,” a feature within Product Studio designed to identify relevant content opportunities across shopping catalogs. It pre-generates high-quality images and videos using AI, which merchants can then save or publish directly across Google platforms. Another significant addition is Smart Bidding Exploration, an opt-in feature for search campaigns that leverages AI to identify new, qualified leads that marketers might otherwise miss.

Further bolstering its offerings, Google has also rolled out new agentic capabilities in Google Ads and Analytics. Dan Taylor, Vice President for Global Ads at Google, emphasized the power of these tools at a virtual media roundtable: “These agentic tools can learn from advertising inputs, including datasets, landing pages, assets, and real-time campaign performance, to take the guesswork out of achieving business goals.”

The company also brought AI Max for Search Campaigns to India, aiming to optimize search ad performance by identifying more relevant and high-performing search queries. This is achieved by learning from brands’ landing pages, existing ads, and keyword lists. Early testing has already shown promising results; for instance, Indian used electronics marketplace Cashify reported a 15% increase in conversions and a 12% reduction in customer acquisition costs after deploying AI Max.

Beyond these new tools, Google announced that ads will begin appearing on AI Overviews in India later this year. Additionally, the company has introduced its shoppable connected TV ads on YouTube in India, expanding interactive advertising possibilities. YouTube’s masthead on mobile will also start serving ads in the country, increasing visibility for advertisers.

India represents a crucial market for Google, not only as its largest user base but also due to consistent growth in ad revenues. Roma Datta Chobey, managing director of Digital Native Industries at Google India, highlighted that YouTube on connected TVs has been the most-watched streaming service on television in India over the past year. She also noted India’s significant engagement with YouTube Shorts, with 87% of Indian consumers using YouTube or Shorts as part of their shopping journey.

The country’s digital advertising market is poised for substantial growth, projected to exceed $7 billion by the end of 2025, with an anticipated over 20% year-over-year growth, according to a recent Dentsu Digital Advertising report. Chobey explained the rapid rollout of these innovations: “India is such a thriving digital ecosystem. We have the largest number of users who are actively trying and testing our products. So, that’s really the reason behind us getting these innovations to India faster.”

Google confirmed that these newly launched features, including AI Max for Search Campaigns, Smart Bidding Exploration, YouTube’s shoppable masthead and CTV, and Performance Max Retention-Only Mode, now support Hindi to improve local campaign compatibility. To further enable granular media planning, buying, and reporting, the company also introduced state-level urban and rural audience filters for Indian advertisers.

In fiscal year 2024, Google’s gross ad revenue in India climbed 11% year-over-year to ₹312.21 billion ($3.6 billion), with net advertising revenue increasing by 18% to ₹27.43 billion ($320 million), underscoring the market’s strategic importance and growth potential for the tech giant.