India Overtakes Japan to Become World’s Fourth-Largest Economy

India has officially surpassed Japan to become the world’s fourth-largest economy, with its gross domestic product reaching USD 4.18 trillion, according to a government statement. The country is now on track to overtake Germany and claim the third position by 2030, driven by sustained economic growth and strong domestic demand.

The United States continues to hold the top spot as the world’s largest economy, followed by China in second place.

India’s economic momentum has remained robust, with real GDP growth accelerating to 8.2 per cent in the second quarter of the 2025–26 fiscal year. This marks a notable increase from 7.8 per cent in the first quarter and 7.4 per cent in the final quarter of the previous fiscal year, reflecting resilience amid global trade uncertainties.

According to the government, domestic factors—particularly strong private consumption—have played a central role in supporting this expansion. The country is currently the fastest-growing major economy in the world.

Global financial institutions have echoed this optimism. The World Bank has projected a 6.5 per cent growth rate for 2026, while Moody’s expects India to remain the fastest-growing G20 economy through 2027. The IMF, OECD, Asian Development Bank, Fitch, and S&P have all raised or maintained positive growth forecasts, citing strong consumer demand and structural reforms.

The government also highlighted encouraging macroeconomic indicators, noting that inflation remains below the lower tolerance threshold, unemployment is declining, exports are improving, and financial conditions remain stable with strong credit flows.

With ambitions of achieving high middle-income status by 2047—the centenary of India’s independence—the country is building on a foundation of economic reforms, sustained growth, and social progress.