India Scrapped the Google Tax — and Now the Full AI Ads Toolkit Is Open to Indian Businesses

For nearly a decade, running Google Ads in India carried a hidden cost. A 6% Equalisation Levy applied to payments made to foreign digital platforms for online advertising. Indian businesses paid it quietly through slightly higher effective ad costs. In April 2026, it was scrapped — and what followed was significant.

What the Google tax was

India introduced the Equalisation Levy in 2016, applying it to digital advertising services provided by foreign companies — primarily Google and Meta. Indian platforms were exempt. The US Trade Representative had flagged it as discriminatory for years.

The Indian government removed it in March 2026, effective from April. The stated reason was trade alignment. The practical effect was immediate for advertisers.

What it means for your ad budget today

That 6% is no longer leaving your campaign. A business spending ₹1,00,000 per month on Google Ads now gets ₹6,000 more in actual delivery. At ₹5,00,000 per month, that is ₹30,000 per month back into your campaigns.

If you work with an agency, verify whether the cost saving is being passed through to your effective budget or absorbed elsewhere. This is worth the conversation.

Google's India AI advertising event

Following the tax repeal, Google hosted a local version of its Google Marketing Live event for Indian marketers — bringing tools to India that debuted in the US in May 2026.

The headline tools include AI Max for Search campaigns, which automatically expands your keyword reach to relevant queries you have not explicitly bid on. Performance Max now supports asset experiments, allowing proper A/B testing within the campaign type. Ask Advisor — a conversational AI tool inside Google Ads — is rolling out as a campaign co-pilot that can suggest adjustments and flag issues in plain language.

Why this matters more than the feature announcements

Every major Google product cycle follows the same pattern. US launch, then global rollout six to eighteen months later, then a scramble among late movers to catch up with early adopters who have already accumulated data and learnings.

Indian advertisers who start using AI Max and Performance Max experiments now will have a real advantage over competitors who wait for the tools to become obvious. The data advantage compounds quickly in Google's AI-optimized system.

The tax removal lowered the cost of entry. The new tools raise the ceiling on what those campaigns can achieve.