Months after the Indian government scrapped the controversial ‘Google tax’ on digital advertising, Google is ramping up its ad services in India with new AI-driven tools across platforms like Search, YouTube, and connected TV.
On Thursday, July 10, Google announced that it will soon start showing ads within AI Overviews for Indian users. These are the AI-generated summaries that appear at the top of search results, alongside traditional web links. This means users in India will soon see ads for products and services directly within these AI-generated search responses.
This update comes at a time when Google Search is undergoing a significant transformation due to the growing use of generative AI. Earlier this week, India became the first country outside the US to get access to AI Mode in Search. This new feature allows users to explore deeper search results by asking follow-up questions and receiving more specific, relevant content.
“Over 15 per cent of the searches that we see on Google are new. But over the past year or so, those new searches are getting longer, more complex, and more conversational. There’s no single right answer or a set of web pages where you want to send somebody to. And so, those are also the places where you could introduce businesses and commercial information earlier in a purchase’s journey,” said Dan Taylor, Vice President, Global Ads at Google, during a virtual media roundtable.
The ads shown in AI Overviews will be clearly marked with a bold black ‘Sponsored’ label to differentiate them from organic results. In response to a question from indianexpress.com about experimenting with other ad formats, Google said, “We’re always working on launching ad formats that address evolving consumer behavior, empowering advertisers and marketers to connect with consumers across their non-linear journeys and drive profitable growth, with recent examples including Shoppable CTV and Shoppable Mastheads on YouTube.”
With Shoppable CTV, users can browse and interact with products directly from their television screens. In India, Google is also enabling advertisers to display shoppable links under YouTube Masthead ads in the mobile app.
“India is a thriving digital ecosystem, we have the largest number of users who are actually trying and testing our products. That’s really the reason behind Google getting these innovations to India faster,” said Roma Datta Chobey, Managing Director, Google India.
Earlier, the Indian government had imposed a 2% tax on digital services provided by foreign tech firms like Google and Amazon, along with a 6% equalisation levy on online advertising revenues. These have now been removed, a move seen by many as a result of US pressure over trade policies.
As for tools aimed at advertisers, Google is bringing its ‘Generated for You’ feature to India. This AI-powered tool analyses a brand’s product catalogue and creates on-brand images and videos that advertisers can use across Google’s platforms.
According to Taylor, the use of Google’s AI to create ad content has jumped by 250%. Addressing concerns that AI might replace creative agencies, Taylor said, “AI is not a strategy, AI is the half. The ‘what’ is still the core marketing strategy…”
He added that while AI can assist with ideation and scaling, it lacks “human lived experience, intuition, cultural nuance, subjective taste, strategic oversight, the emotional resonance that truly connects with an audience, and ethical considerations.”
Google has also introduced agentic AI features in Google Ads and Google Analytics. These tools learn from advertiser inputs—such as data, landing pages, and live campaign performance—to suggest keywords, creatives, insights, and more.
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