“There is so much of bot traffic and there’s so much of real traffic and there’s so much of agentic traffic. So we stopped reporting on the traffic side of it,” IndiaMART InterMESH chief executive officer (CEO) Dinesh Agarwal told analysts during the company’s Q4FY26 earnings call on April 28.
In December last year, IndiaMART sued OpenAI in the Calcutta High Court (HC) for excluding it from AI-generated discovery while deploying AI on three decades of proprietary behavioural data with no disclosed governance framework under the Digital Personal Data Protection (DPDP) Act.
Can IndiaMART trust its own traffic numbers? Unique business inquiries, the number of genuine buyer requests reaching suppliers each quarter, is IndiaMART’s key platform health metric. Agarwal attributed registered buyer inflation to agents “writing simple agents to do multiple phone numbers to simply to scrape the website or simply send one inquiry or read data.” Mandatory OTP verification for multiple inquiries, introduced in response, caused a 1% drop in conversion from traffic to inquiries.
Active buyers fell 3% year-on-year to 41 million even as registered buyers rose 9% to 230 million. IndiaMART is trading active buyer volume for platform trust, with no certainty the trade-off will hold.
In December 2025, IndiaMART moved the Calcutta HC, alleging ChatGPT selectively excluded it from AI-generated responses while surfacing rival business-to-business (B2B) marketplaces. The court found a strong prima facie case of selective discrimination, observing the exclusion appeared to have occurred “without any logic” and could lead to loss of goodwill and commercial injury, per MediaNama’s coverage of the case.
On the call, Agarwal said: “I don’t think there’s an impact on B2B inquiry have reached to the ChatGPTs. I don’t think they are yet very good at the B2B queries.” IndiaMART is arguing in court that AI-driven exclusion causes commercial harm while telling investors it is not yet a threat.
Who governs IndiaMART’s AI? “By combining three decades of our proprietary data with next-generation intelligence, we are making the discovery process much more precise and seamless for both buyers and sellers,” Agarwal said. The investor presentation positions this behavioural data across product, location, price, and quantity signals as IndiaMART’s core competitive moat. AI products currently live on the platform:
“Hopefully with AI coming in, a lot of horizontal parts can be taken care of, and maybe then we can invest only on the vertical part of the business, where we would be able to focus mainly on few categories to be able to disproportionately generate better business,” Agarwal said
The DPDP Act, notified in November 2025, applies to platforms that process personal data. IndiaMART processes data of 230 million registered buyers and 8.7 million supplier storefronts with no public disclosure of data fiduciary obligations, consent framework, or data processing agreements. No Indian regulator has issued guidance on agentic traffic or AI-driven matchmaking at this scale.
Is IndiaMART a neutral conduit or an active moderator? Content moderation is listed as an AI use case in the investor presentation with no details on how decisions are made, what gets removed, or what appeals mechanism exists. IndiaMART is fighting a Delhi HC case over illegal drug sales on its platform where it claimed Section 79 of the Information Technology (IT) Act safe harbour, arguing it is a neutral conduit not responsible for what sellers list, as MediaNama has reported.
Claiming AI-driven content moderation and neutral intermediary status in court simultaneously are positions that need to be reconciled. If IndiaMART’s AI actively moderates listings, it may no longer qualify for safe harbour under Section 79.
West Asia conflict and price hike compound the supplier decline. MediaNama reported that IndiaMART lost 3,715 paying suppliers in Q3FY25. The platform also lost 1,236 paying suppliers in Q4FY26, the second consecutive quarter of net decline. Agarwal attributed the Q4 net supplier loss to two causes:
“If there was no war, we could have been probably 2,000 customers positive. So that gives you the entire quarter, maybe 3,000. And out of that, I would say 1,000-1,500 could have been because of the war, and 1,500 could have been because of the price increase,” Agarwal said. “We are not going back on pricing,” he added, noting SMEs “are really going through a lot of pain right now.”
On net additions guidance, Agarwal suspended it entirely: “We will continue to have no guidance on net additions until we have multiple quarters of continual success.”
Silver churn is at historic highs. Silver is IndiaMART’s entry-level subscription tier and the primary pipeline for upgrading suppliers to gold and platinum tiers. 39% of IndiaMART’s suppliers are also buyers, meaning supplier churn compounds active buyer decline simultaneously. “We are on an annual basis around 10-15% down on the retention numbers,” Agarwal said. Current silver churn rates:
Is IndiaMART caught in a vicious loop? “Yes, there is definitely a worry of falling into the vicious loop because of that virtuous cycle where the suppliers were increasing and buyers were increasing. Now, it has to increase. The buyers have to come more frequently, and the supply side has to become more trustable and more better,” Agarwal said.
With free supplier penetration at approximately 50% of the serviceable market: “I think we have hit a little bit of a saturation point,” he added. The proprietary behavioural data IndiaMART will increasingly rely on to compensate has no disclosed governance framework.
Agarwal framed the remaining opportunity against the Chinese B2B marketplace 1688, which has approximately a million paying suppliers at $2,000 annualised revenue per paying supplier (ARPU). “We still feel that there is at least 2x more opportunity from here,” he said.
IndiaMART is shifting from organic to paid acquisition. IndiaMART is running performance marketing experiments across categories.
Agarwal said: “Until we reach a Rs 10 crore per quarter continuous number, I won’t be able to give you how much traffic is coming through organic search, how much traffic is coming through direct, how much traffic is coming through affiliate, and how much traffic is coming through AdWords or Facebook.”
The shift signals IndiaMART can no longer rely purely on organic growth to acquire buyers.
Three-tier pricing is the new monetisation lever. IndiaMART is building a three-tier differential pricing architecture across its category base: a standard tier covering the majority of categories, a premium tier for select categories, and a super premium tier for the top 1,000 categories.
Agarwal said this gives IndiaMART better insight into category-level ARPU, buyer demand, seller demand, and location-wise demand. Suppliers in standard categories pay the base rate but receive less visibility than those in higher tiers.
As IndiaMART shifts toward ARPU-led growth, the gap between what smaller suppliers pay and what they receive is likely to widen. No public disclosure exists on how suppliers are assigned to tiers or how they can move between them.
Will bundling Busy Infotech save IndiaMART? Busy Infotech, IndiaMART’s wholly owned subsidiary, sells accounting and billing software to the same MSME base that uses IndiaMART’s marketplace. “In times to come, we will start to see what synergetic bundling can we do between Busy and IndiaMart,” Agarwal said. A bundle would create significant switching costs — suppliers using both IndiaMART for discovery and Busy for accounting become deeply embedded and harder to lose.
The Rs 725 crore invested across accounting software platforms, including Vyapar, Realbooks, and Livekeeping, remains undeployed as a bundled product. Whether bundling constitutes an abuse of dominance under competition law has not been examined publicly.
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