India Overtakes Japan to Become World’s 4th Largest Economy, Eyes 3rd Spot Ahead of Germany
In a historic economic milestone, India has officially surpassed Japan to become the world’s fourth-largest economy, with a nominal Gross Domestic Product (GDP) crossing the $4 trillion mark. This significant shift was confirmed by B.V.R. Subrahmanyam, CEO of NITI Aayog, during a press briefing at the 10th Governing Council Meeting of the policy think tank on Saturday.
“We are the fourth-largest economy as I speak. We are a $4 trillion economy, and this is not my data—this is from the International Monetary Fund (IMF),” said Subrahmanyam. “India today is larger than Japan.”
According to the IMF’s World Economic Outlook, India’s nominal GDP has risen to $4.187 trillion, edging past Japan’s $4.186 trillion, a landmark shift that places India behind only the United States, China, and Germany in global economic rankings.
|Blast From the Past : India set to become third-largest economy by 2030 with GDP of over $7 trillion: SP Global |
Growth Momentum Continues
India remains the fastest-growing major economy in the world, and the IMF projects that this momentum will continue in the coming years. India is also the only major economy expected to clock over 6% growth in the next two years, a testament to its resilience and expanding economic base amid global uncertainties.
Projections show India’s GDP is likely to touch $5.58 trillion by 2028, at which point it is expected to overtake Germany to become the third-largest economy globally. Subrahmanyam remarked that with consistent reforms and policy implementation, this leap could happen in just 2.5 to 3 years.
🇮🇳 GDP $4.39 trillion
🇯🇵 GDP $4.27 trillionHistorical Milestone For India’s Economy as it overtakes Japan as the world’s fourth-largest economy. pic.twitter.com/agyUZdYfn9
— Rishi Bagree (@rishibagree) May 6, 2025
Germany and Japan Face Headwinds
While India rises, its competitors are facing slowing growth. Germany, currently the third-largest economy, is projected to see zero growth in 2025 and a modest 0.9% growth in 2026, due to its exposure to ongoing global trade disruptions. By 2028, Germany’s GDP is estimated to reach $5.25 trillion, behind India’s projected $5.58 trillion.
Japan, now pushed to fifth place, is similarly affected. The IMF forecasts Japan’s growth to stagnate at 0.6% for both 2025 and 2026, amidst the economic fallout from the global tariff war and domestic structural issues.
When I was in business school, the idea of India overtaking Japan in GDP felt like a distant, almost audacious dream. Today, that milestone is no longer theoretical — we’ve become the world’s fourth largest economy.It’s no small achievement. Japan has long been an economic… pic.twitter.com/28LgnC4Osx— anand mahindra (@anandmahindra) May 25, 2025
Global Economic Outlook
According to IMF data, the United States will retain its top spot with a projected GDP of $30.5 trillion in 2025, though its growth is expected to slow to 1.8% in 2025 and 1.7% in 2026. China, in second place, is forecast to grow steadily, with a 2025 GDP of $19.2 trillion.
Across Europe, growth is expected to be subdued. The Euro Area is projected to expand by just 0.8% in 2025, improving slightly to 1.2% in 2026. France is expected to post 0.6% and 1% growth in the same years, while Spain is forecast to lead the bloc with 2.5% growth in 2025 before moderating to 1.8% in 2026. The UK is projected to grow at 1.1% and 1.4% in the respective years.
India’s Path Forward
Experts view India’s steady climb up the global economic ladder as a reflection of its demographic advantage, digital economy expansion, domestic manufacturing push, and strong policy frameworks. If current trends persist, India’s ambition to join the ranks of the world’s top three economies is well within reach.
This development underscores India’s growing influence in shaping the global economic order and signals a major shift in the balance of economic power in the Asia-Pacific region.
Agencies reported that Union ministers and BJP leaders hailed the milestone as a moment of national pride and a testament to Prime Minister Narendra Modi’s leadership and vision for a rising India.
Union Minister for Women and Child Development Annapurna Devi said the achievement reflects a decade of consistent economic progress.
