India has officially overtaken Japan to become the world’s fourth-largest economy, according to B.V.R. Subrahmanyam, the CEO of NITI Aayog. Speaking at a press conference following the 10th NITI Aayog Governing Council Meeting, Subrahmanyam shared that India has reached a GDP of USD 4 trillion, citing data from the International Monetary Fund (IMF) to validate the milestone.
“We are the fourth-largest economy as I speak. We are a USD 4 trillion economy, and this is not my data—it’s IMF data. India today is larger than Japan,” said Subrahmanyam, underlining the credibility of this achievement on the global stage.
This marks a historic shift in the global economic order, as India now stands behind only the United States, China, and Germany. The rapid momentum seen in recent years indicates that India is on track to surpass Germany within the next 2.5 to 3 years and rise to the third position globally.
IMF Validates India’s Growth Surge
The IMF’s World Economic Outlook report, released earlier this month, supports this announcement. According to their projections, India’s nominal GDP is expected to touch $4,187 billion in 2025, overtaking Japan’s estimated $4,186 billion. These numbers, although close, are symbolic of a major transition in global economic power centers, particularly within Asia.
The report also forecasts sustained high growth for India over the next few years. India remains the fastest-growing major economy in the world and is projected to be the only major economy to maintain over 6% growth annually through 2026.
By 2028, India’s GDP is expected to soar to $5.58 trillion, comfortably overtaking Germany, whose projected GDP by then is $5.25 trillion. This will cement India’s position as the third-largest economy in the world.
Japan and Germany Face Sluggish Growth
In contrast, both Japan and Germany—historically among the most powerful global economies—are expected to struggle with economic stagnation in the years ahead. Japan’s GDP growth is projected to remain subdued at 0.6% in 2025 and 2026, while Germany’s economy is forecast to stagnate in 2025 and grow by only 0.9% in 2026.
Global analysts attribute these trends to various challenges. Germany’s export-driven economy is likely to be hit hard by continued global trade disruptions and the energy transition, while Japan’s ageing population and low consumption rates continue to hamper its recovery.
Both economies are also likely to be adversely impacted by the ongoing global tariff wars, with the United States playing a significant role in the reconfiguration of international trade dynamics.
A Steady Rise Amid Global Headwinds
India’s rise to the fourth position is particularly significant given the current global economic turbulence. While much of the developed world grapples with sluggish growth, supply chain disruptions, and geopolitical uncertainties, India’s resilience has stood out.
The country’s ability to maintain high growth amidst these headwinds is driven by multiple factors:
- Strong domestic demand across sectors
- Robust manufacturing and services growth
- Strategic government reforms and investments
- Widespread digital transformation
- A youthful and rapidly urbanizing population
- Continued global investor confidence
India’s tech and startup ecosystems have also contributed to a more dynamic, future-ready economy. Sectors such as renewable energy, electric mobility, digital services, and financial technology are expanding rapidly, adding depth and diversification to the economic growth story.
The Road to Third-Largest Economy
With Germany only slightly ahead in terms of nominal GDP, Subrahmanyam emphasized that India could climb to the third spot in less than three years. “If we stick to what is being planned and thought through, it’s just a matter of another 2 to 3 years before we become the third-largest economy,” he said.
To reach this milestone, India will have to continue implementing pro-growth policies, boost infrastructure, improve logistics, deepen capital markets, and enhance ease of doing business. Sustained investment in education, healthcare, green energy, and digital infrastructure will also be crucial.
Global Context and Forecasts
Globally, the United States retains the top spot, with a projected GDP of $30.5 trillion in 2025, followed by China at $19.2 trillion. However, both economies are expected to see slower growth: the US at 1.8% in 2025 and 1.7% in 2026, while China’s growth is expected to moderate due to internal restructuring and demographic pressures.
The Euro Area is expected to grow by just 0.8% in 2025, with a slight improvement to 1.2% in 2026. Among European countries, Spain is projected to perform the best with 2.5% growth in 2025, though slowing to 1.8% in 2026. The United Kingdom is expected to register moderate growth at 1.1% in 2025 and 1.4% in 2026.
A Defining Moment for India
This economic milestone is not just about numbers—it reflects India’s transformation into a global powerhouse. From battling pandemic-induced disruptions to leading global digital public infrastructure initiatives like UPI, India has emerged as a confident and ambitious nation on the rise.
The economic ascent also has geopolitical implications. With a larger economy, India will have greater influence in forums like the G20, BRICS, and the UN, and more leverage in global trade, climate negotiations, and technology standards.
India’s rise to the fourth-largest economy is a landmark moment and a validation of the country’s strategic planning and consistent reform agenda. As the world recalibrates its economic order, India is no longer an emerging economy—it is a leading force, charting its own path, shaping the global narrative, and offering a model of inclusive, sustainable growth.
With eyes set on becoming the third-largest economy by 2028, India’s journey promises to inspire not just its own citizens, but economies across the world seeking resilience, reform, and renewal.
Source: DD News, IMF World Economic Outlook, NITI Aayog Press Briefing
