Netflix (NFLX 1.87%) considers India one of its most important markets for the future with the streaming specialist believing it could score 100 million subscribers in the country. However, the company is still far from reaching that target, as a result of competition from more affordable streaming services provided by the likes of Amazon and Disney.

Netflix reportedly has just five million paid subscribers in India, compared to Disney+ Hotstar's 46 million and Amazon Prime Video's 19 million. The company's comparatively premium pricing plans have turned out to be a stumbling block in this market, but Netflix is now looking to turn its fortunes around with an aggressive strategy to attract more subscribers.

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Netflix drastically cuts prices in India

Netflix has reduced the price of its subscriptions in India by 18% to 60%. The mobile-only plan that was previously priced at 199 Indian rupees ($2.61 at the current exchange rate) per month has been reduced 25% to 149 rupees ($1.95). Meanwhile, the standard plan that allows customers to watch content on any two devices in 1080p resolution has witnessed a price reduction of 23% to 499 rupees ($6.54) per month.

The top-of-the-line premium plan now costs 649 rupees ($8.51) per month compared to 799 rupees ($10.48) a month earlier, and it allows users to watch content in 4K resolution on up to four devices simultaneously. The basic plan, which allows users to consume content on any one device in 480p resolution, has seen the biggest reduction -- Netflix will now charge 199 rupees per month, compared to the earlier price of 499 rupees.

The streaming giant is now in a better position to tap into the fast-growing video streaming market in India, especially as rivals have raised prices. Amazon increased the price of its Prime service in India by as much as 50% with an annual subscription now costing 1,499 rupees ($19.66), up from 999 rupees ($13.10). The price of Amazon's monthly plan also went up about 40% to 179 rupees ($2.35).

Disney also raised prices for its Disney+ Hotstar service earlier this year by introducing new subscription tiers. The base subscription now starts at 499 rupees ($6.60) per year, up from 399 rupees. Even then, it is still far cheaper than what Netflix charges.

Given the price-sensitive nature of this market, Netflix's reductions could turn out to be a big deal for its Indian expansion in the long run.

A smart move that could reap long-term gains

Though Netflix is still a small player in India based on subscriber count, the company's premium pricing has helped it corner a substantial revenue share of that market. Research company Media Partners Asia estimates Netflix has a 14% share of India's online video streaming revenue, compared to Amazon's 7%.

However, in a country with a per capita gross domestic product of just $1,927, there is likely greater potential in Netflix's decision to make its subscription plans more affordable and accessible to a wider swathe of this market.

The recent changes should pave the way for stronger growth from the Indian video streaming market, which is still in its early phases of development. The video streaming market in India will generate $1.5 billion of revenue this year, a number that will increase to $4.0 billion in 2025 and $12.5 billion in 2030, according to third-party estimates. Netflix has made a smart move by casting a wider net for subscribers in India, a strategy that should help it capture a growing share of this promising video streaming market.