Generative AI services companies are reworking their pricing playbooks to win over India’s vast and cost-conscious digital population. Open AI, the creator of ChatGPT, is the latest to dived into the bottom of the AI market pyramid by launching a more affordable subscription tier in India called ChatGPT Go, priced at Rs 399 per month.
Nick Turley, head of ChatGPT at OpenAI, said, ChatGPT Go gives users 10x higher message limits, 10x more image generations, 10x more file uploads, and 2x longer memory compared with its free tier. “Making ChatGPT more affordable has been a key ask from users,” he said, noting that India’s feedback will shape how the company expands the model globally.
Price wars heat up in India’s AI market
Other GenAI services companies are not too far behind. OpenAI, the creator of ChatGPT, joined hands with Grammarly, the AI-based English correction platform, last month to launch sharply reduced subscription plans for Indian users. Grammarly cut its subscription price to Rs 250 a month (billed annually), nearly three-fourths lower than its global rate.
Perplexity, another rising challenger to ChatGPT and Google’s Gemini, struck a deal with Bharti Airtel earlier this month to offer its premium services free to subscribers. Normally priced at around Rs 17,000 a year, the chatbot is now accessible to Airtel customers at no additional cost—an aggressive play that has set off a new “volume game” in the sector.
Google has also rolled out free access to some of its premium AI tools—including Google AI Pro, Deep Research, and NotebookLM—along with 2TB of cloud storage. The bundle, usually priced at nearly Rs 19,500 a year, is now being offered at no cost to Indian users, underscoring the high stakes. Industry watchers say these price wars reflect the growing recognition that India, with its young, digitally native Gen Z population, cannot be monetised at Western subscription levels. Netflix, Spotify, and Microsoft previously adopted similar strategies to grow their user bases in the country.
India emerges as the biggest AI battleground
OpenAI’s newly introduced ChatGPT Go plan sits between its free and Plus tiers. The free plan offers limited GPT-5 access, slower image generation, and minimal memory. The Go tier, at Rs 399, upgrades this to faster image creation, longer memory, and greater file and query limits. The Plus plan remains priced at Rs 1,999, bundling advanced reasoning with GPT-5, access to Sora video generation, Codex agent tools, and expanded research features. At the top end, OpenAI’s Pro subscription costs Rs 19,900 per month, offering unlimited GPT-5 access, advanced research capabilities, and early experimental features.
OpenAI currently claims 700 million global users, with India accounting for its second-largest consumer base. Analysts expect the company to cross 1 billion active monthly users soon, with India contributing the lion’s share. With China largely closed off, India has become the largest market for global consumer tech. Both Instagram and YouTube count India as their biggest audience base. AI services, experts argue, are likely to follow the same pattern. “Generative AI is no longer a premium novelty here—it’s becoming a productivity essential,” said a Delhi-based startup founder. “But the single biggest driver of adoption is affordability. Whoever cracks that balance will dominate the market.”
Krishna Khandelwal, CEO of Hunar.ai, said: “In India, the cost of labour—especially in knowledge work—remains remarkably low. A software engineer in Bengaluru earns about $12,000 annually, barely one-tenth of the $125,000 average in Silicon Valley. This disparity underpins the rise of Global Capability Centres (GCCs), where organisations leverage labour-cost arbitrage to drive efficiency. For AI adoption in India, pricing models must reflect this reality. If AI services cost more than human labour without delivering clear efficiency gains, adoption will stall. But when priced right, AI does not compete with labour; it complements it — enhancing output while preserving the cost advantages that make India attractive.
