India has officially overtaken Japan to become the world’s fourth-largest economy, marking a historic milestone in the nation’s economic journey. The announcement was made by NITI Aayog CEO B.V.R. Subrahmanyam, who cited the latest International Monetary Fund (IMF) data to confirm that India’s nominal Gross Domestic Product (GDP) has reached approximately $4.19 trillion in 2025, marginally surpassing Japan’s estimated GDP for the year
This milestone reflects India’s sustained economic growth and its growing influence on the global stage.
This ascent places India behind only the United States, China, and Germany in the global economic rankings.
Until 2024, India was the world’s fifth-largest economy, but robust growth and favorable global conditions have propelled it past Japan, a nation long regarded as an economic powerhouse.
“We are the fourth largest economy as I speak. We are a USD 4 trillion economy as I speak, Subrahmanyam stated, emphasizing the significance of this achievement."
This advancement not only underscores India’s position as a key player in the global economic landscape but also reflects the confidence of investors and international markets in its long-term potential. With a demographic advantage, a strong digital economy, and a commitment to sustainability, India is poised to challenge for the top three positions in the world soon.
Japan, long seen as an economic powerhouse, has faced demographic headwinds and slower growth in recent years. India's momentum, by contrast, continues to be powered by its young population, dynamic startup ecosystem, and policy-driven initiatives like Make in India, Digital India, and PLI (Production Linked Incentive) schemes.
With continued focus, India aims to overtake Germany next and become the world’s third-largest economy, in line with its $5 trillion GDP vision in the near future
However, there are, and other opportunities lies as despite this remarkable progress; India’s per capita income remains significantly lower than that of advanced economies. Additionally, the country continues to face macroeconomic challenges such as inflation, rising public debt, and income inequality.
Experts stress that to sustain this growth and make it inclusive; India must focus on continuous reforms in:
- Governance and public service delivery
- Infrastructure and logistics
- Education and skill development
- Manufacturing competitiveness
- Ease of access to capital for startups and MSMEs
Key Facts at a Glance:
Rank | Country | Projected 2025 GDP (USD Trillion) |
1 | USA | 30.5 |
2 | China | 19.2 |
3 | Germany | 4.74 |
4 | India | 4.19 |
5 | Japan | 4.18 |
Source: IMF World Economic Outlook, April 2025
India’s emergence as the world’s fourth-largest economy is a testament to its economic resilience, policy reforms, and the collective efforts of its people. As the nation sets its sights on becoming the third-largest economy, the focus will increasingly shift toward raising per capita income and ensuring that growth translates into prosperity for all Indians.