The integration of AI chatbots into customer engagement strategies has significantly reshaped how Indian businesses interact with consumers across industries such as e-commerce, banking, education, healthcare, and travel. This paper presents a secondary data-based analysis of how AI-powered chatbots are transforming consumer engagement in India by reviewing academic literature, industry white papers, government reports, and real-world case studies. The study explores key marketing applications of chatbots, including lead generation, personalized recommendations, customer service automation, feedback collection, and post-purchase support. The paper highlights case examples from Indian companies such as HDFC Bank (EVA), Apollo, Flipkart, and BYJu, MyGov App demonstrating the impact of chatbot integration on improving customer response times, increasing conversion rates, and reducing operational costs. Through a secondary data analysis approach, the study identifies key benefits such as improved personalization, real-time engagement, scalability, and data-driven marketing insights. It also addresses the challenges faced by Indian firms in chatbot adoption, including technological limitations, user trust, data privacy, and the need for culturally relevant conversational design. By synthesizing current trends and practices, the paper provides actionable insights for marketers, digital strategists, and customer experience professionals. The findings suggest that AI chatbots are not just service tools but strategic assets that can elevate the overall consumer experience when designed and deployed effectively. This research contributes to the evolving discourse on AI in marketing and offers a foundation for future empirical research on chatbot adoption and effectiveness in the Indian context.