India’s economic ascent marks a defining global shift, as the country powers past Japan and sets its sights firmly on the world’s top three economies.
India has officially overtaken Japan to become the world’s fourth-largest economy by nominal GDP, according to the government’s year-end economic review. The milestone places India behind only the United States, China, and Germany, reinforcing its status as one of the most dynamic major economies in the world.
According to the review, if current trends continue, India is on course to claim third place within the next few years. The ranking will be formally confirmed in 2026, once final annual GDP data is released, but officials say the trajectory is already clear.
“With GDP valued at USD 4.18 trillion, India has surpassed Japan to become the world’s fourth-largest economy and is poised to displace Germany from the third rank in the next 2.5 to 3 years with a projected GDP of USD 7.3 trillion by 2030,” the review stated, as carried by the federal Press Information Bureau.
The government reported that real GDP expanded by 8.2 per cent in the second quarter of FY 2025–26, accelerating from 7.8 per cent in the first quarter and 7.4 per cent in the final quarter of FY 2024–25. This marked India’s strongest growth performance in six quarters.
The uptick was driven by “resilient domestic demand amidst global trade and policy uncertainties,” with domestic drivers, led by robust private consumption, playing a central role in supporting the expansion. Export performance has also improved, with merchandise exports rising to $38.13 billion in November from $36.43 billion in January. Growth in engineering goods, electronics, pharmaceuticals, and petroleum products underpinned this rise.
Global institutions have echoed the government’s optimism. The World Bank projects growth of 6.5 per cent in 2026. Moody’s expects India to remain the fastest-growing G20 economy. The IMF, OECD, S&P, Asian Development Bank, and Fitch have all raised or maintained strong growth forecasts for India over the next two years.
Earlier this year, BVR Subrahmanyam, chief of Niti Aayog, said, “We are the fourth-largest economy as I speak. We are a $4 trillion economy as I speak, and this is not my data. This is IMF data. India today is larger than Japan.”
He added that India was on course to overtake Germany within about three years. Analysts, however, urged caution, warning that headline GDP rankings should not overshadow deep-rooted socioeconomic challenges and persistent inequality that still demand urgent attention.
