When OpenAI rolled out its lowest pricing model for ChatGPT in India at INR 399 a month, it seemed like a seminal moment for the country’s evolving AI landscape.

ChatGPT Go, according to a post on X by Nick Turley who is OpenAI vice-president and head of ChatGPT, raises the message limits, image generations and file uploads by 10 times each, and doubles the memory from the free tier.

OpenAI also introduced a UPI payments feature for buying subscriptions – a well thought-out strategy to tame the digitally native young Indian consumers.

While India has seen accelerated interest from the OpenAI leadership in recent times with respect to partnerships with local businesses, policy adherences and investments, the decision to revise its global prices for Indian consumers should not be seen in isolation.

The OpenAI move comes close on the heels of Aravind Srinavas-led Perplexity making its INR 17,000 annual subscription plan, Perplexity Pro, free for Airtel users last month. Around the same time, Google made its premium AI model, Gemini Pro, which was priced at INR 19,500 a year, free for students in India.

While we wonder why the world’s largest AI companies are moving to a discount-based strategy for India, especially when their basic model remains free and when they are yet to accept advertisements to make money, what turns out is that it is not merely a pricing war – there’s more to read between the lines.

India, An Inexorable Beckoning

The US is the largest market – both in terms of demand and investments – for AI, while India ranks seventh, according to consulting firm Spherical Insights. Sensor Tower Data shows that Indian users spent only $8 Mn on buying ChatGPT subscriptions since 2023, when Americans shelled out $330 Mn.

But, armed with an over-a-billion-strong smartphone-clad population and an internet userbase of more than 886 Mn, India makes the second-largest market for ChatGPT after the US.

Accordingly, ChatGPT so far maintained the standard pricing for its lowest subscription tier, ChatGPT Plus, at $20 a month. But as its competitors thrashed out a discount-led strategy for a 1.4 Bn-strong consumer market aged averagely at 25-35 years and an........

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