Google Rolls Out AI Marketing Tools in India After Google Tax Repeal

By Sulagna Halder 

NEW DELHI:

Google has officially launched its new suite of AI powered marketing tools in India, following the nationwide repeal of the controversial 6 percent equalisation levy, commonly known as the “Google tax”, from 1 April 2025.

The announcement was made at the Marketing Live India event on 10 July, during which Google unveiled innovations including AI integrated Search Ads, creative content generation via its Product Studio, campaign optimisation tools and new shopping experiences on YouTube and connected TV platforms. Ads will be embedded into AI generated search summaries known as AI Overviews, on both desktop and mobile later this year, with a bold “Sponsored” label to distinguish them from organic responses.

Dan Taylor, Vice President for Global Ads at Google, explained:

“As people discover and make decisions on Google in new ways, this expansion gives businesses more opportunities to reach broader audiences in these moments”.

With the repeal of the equalisation levy, foreign platforms that previously paid the 6 percent tax will no longer face withholding obligations on advertising income costs that Indian advertisers often bore indirectly. The move was seen as a strategic effort by New Delhi to ease trade friction with the United States and avoid retaliatory tariffs threatened by President Donald Trump.

The newly introduced tools include AI Max for Search campaigns, which automatically tunes ads using clients’ landing pages, keywords and performance data. Early testing by Indian firms like Cashify showed a 15 percent lift in conversions and a 12 percent reduction in acquisition costs. Meanwhile, the Generated for You feature in Product Studio helps generate product visuals and marketing concepts based on merchant catalogues, trending themes and seasonal campaigns, Google reports advertiser adoption of AI creative tools has risen over 250 percent in the past year.

At the same event, Google also unveiled shoppable ads on connected TV via YouTube and mobile mastheads, allowing users to click through to product pages directly, an enhancement designed to engage consumers during their purchase journey.

This comprehensive rollout is particularly timely, given that Google launched its AI Mode search experience in India on 8 July, making the country the first outside the US to offer multimodal voice, text and visual based AI search to all users through a dedicated tab on Google Search and the app.

Industry observers expect that removing the Google tax will benefit both Indian advertisers via reduced marketing costs and foreign tech firms, by lowering compliance burdens and improving margins. It is also seen as a diplomatic gesture supporting India‑US trade objectives and the planned bilaterally negotiated trade pact aiming to increase two way trade to $500 billion by 2030.

With India’s digital advertising expenditure projected to continue its rapid ascent, Google’s AI tools arrive at a moment when marketers are increasingly seeking smarter, more automated solutions. By integrating ads within AI driven search results and improving creative automation, the company anticipates enabling advertisers to reach consumers more effectively while preserving transparency.

As India enters a new era of digital marketing shaped by generative AI and regulatory reform, Google’s recent announcements signal a significant shift in how businesses, both large and small will craft, optimise and measure their advertising strategies in a more intelligent and responsive ecosystem.