India Emerges as a Global Hotspot for Consumer AI Use, BCG Report Says

Indian consumers are among the world’s most aggressive adopters of generative artificial intelligence (GenAI) tools for shopping and brand decisions, even as inflation and geopolitical uncertainty force households globally to rethink where they spend, a new report by Boston Consulting Group said.

BCG’s latest Global Consumer Radar survey shows that 64% of Indian consumers now use GenAI tools, one of the highest adoption rates worldwide, as shoppers increasingly rely on AI to compare products, evaluate brands and guide purchasing choices.

The figure highlights how fast India is moving from early experimentation to mainstream consumer use of AI, even as spending power comes under pressure.

The surge in AI adoption comes against a backdrop of rising costs. Consumers across major economies expect to spend more in the months ahead, not because of stronger demand, but because inflation is forcing higher outlays, the report found.

In developed markets, 84% of respondents said inflation is the main reason they expect spending to rise, compared with 70% in developing economies.

That increase in spending is paired with sharper tradeoffs. Across countries surveyed, consumers said they plan to cut back on discretionary categories such as alcoholic beverages, apparel, prepared foods and packaged snacks. 

In developed markets, all countries surveyed reported intended cutbacks in alcohol, while Brazil was the only developing economy where similar reductions were widely expected.

Economic sentiment is also diverging sharply. Since June 2025, consumer confidence in growth has turned increasingly negative in most developed economies, with about half of respondents expecting geopolitical conflicts or global shocks to slow their country’s growth. Consumers in France, Germany, the UK and the US are increasingly worried about unemployment or recession, while respondents in Japan, Brazil and China remain relatively more optimistic.

India sits at an unusual intersection of those trends. While inflation pressures persist, the rapid uptake of GenAI is reshaping how consumers navigate tighter budgets.

BCG found that global consumer use of GenAI rose 50% between February and November 2025, with shopping-related use growing faster than AI use for work or language translation. In India and other fast-digitizing markets, AI is increasingly acting as a daily shopping assistant rather than a novelty.

The report suggests that AI-guided purchasing is approaching parity with work-related GenAI use, a shift that has major implications for consumer brands. As shoppers rely on AI to filter options and build confidence before buying, visibility inside AI-driven recommendation and answer systems is becoming as important as traditional search placement.

At the same time, stated consumer values continue to clash with actual behavior. While sustainability remains a concern for many shoppers, few are willing to pay more for it. In the automotive category, 71% of consumers said sustainability matters, but only 8% said they would pay a premium for sustainable options, a gap that has barely shifted since 2022.

Human habits add another layer of inertia. Although more than half of consumers globally say they are open to trying new brands, over 80% still default to brands they already know, underscoring how difficult it remains to change purchasing behavior even in a digitally saturated environment.

Consumers across major economies expect to spend more in the coming months, not because of increased confidence or discretionary demand, but largely because inflation is forcing higher outlays, according to a new report by Boston Consulting Group (BCG).

The BCG report, based on surveys across developed and developing markets, finds that inflation is the primary driver behind anticipated spending increases, particularly in developed economies. Eighty four percent of respondents in developed markets said inflation accounts for their higher expected spending, compared with 70 % in developing markets.

Despite this rise in spending, consumers are becoming more cautious about where they allocate their money. 

Categories such as alcoholic beverages, apparel, prepared foods, and packaged snacks are among those where consumers plan to cut back. 

In developed markets, all surveyed countries reported an intention to reduce spending on alcohol, while Brazil was the only developing market where consumers predicted similar cutbacks.

The report also highlights growing pessimism around economic growth, especially in advanced economies. Since June 2025, consumer confidence has declined across most developed countries surveyed. Around 50 % of respondents in developed markets now expect geopolitical conflicts or global events to slow their country’s economic growth, more than twice the share seen in developing markets.

Consumers in France, Germany, the United Kingdom, and the United States are increasingly concerned about the possibility of widespread unemployment or economic depression. In contrast, respondents in Japan, Brazil, and China expressed a more optimistic outlook, with a greater share expecting continued economic stability or growth.

This divergence has created a polarized global consumer environment, adding complexity for companies selling goods and services across multiple regions. 

According to BCG, businesses must now navigate not only inflation and geopolitical risk but also shifting behaviors driven by technology, tradeoffs, and human decision making.

One of the most notable shifts identified in the report is the rapid rise in the use of generative artificial intelligence (GenAI). BCG found that consumer use of GenAI increased by 50% between February 2025 and November 2025. While usage at work and for language translation has stabilized, shopping related GenAI use continues to grow.

Consumers are increasingly relying on GenAI tools to compare products, evaluate brands, and build confidence before making purchases. In fast digitizing markets such as India, GenAI adoption has reached 64%, significantly higher than in many developed economies. BCG notes that the use of AI to guide shopping decisions is now approaching the same level as work related use.

The report also underscores the growing need for consumers to make tradeoffs, particularly around sustainability. While many consumers say they are concerned about environmental impact, few translate that concern into purchasing behavior. In the automotive category, 71 % of consumers cite sustainability as an issue, yet only 8 % say they are willing to pay a premium for sustainable options. This gap between stated values and actual behavior has remained largely unchanged since 2022.

Human factors further complicate purchasing decisions. Although 55 % of consumers say they are open to trying new brands, more than 80 % ultimately revert to brands they already know. This inertia persists despite the expansion of digital touch points and marketing channels, suggesting that changing consumer habits remains difficult.

BCG argues that companies must respond by closely monitoring consumer sentiment and adapting strategies accordingly. The report recommends that businesses assess category level risks, rethink how they appear within AI driven shopping ecosystems, and find ways to reduce tradeoffs for consumers, particularly around cost and sustainability.