India Surpasses Japan to Become the World’s Fourth-Largest Economy

TL;DR:

• India is now the world's fourth-largest economy, surpassing Japan.
• This growth is driven by strong economic conditions and favorable geopolitics.
• India aims to become the third-largest economy within 2.5-3 years.

India has overtaken Japan to become the world’s fourth-largest economy, according to NITI Aayog CEO B.V.R. Subrahmanyam. Speaking at the 10th Governing Council meeting of NITI Aayog, Subrahmanyam stated that India’s nominal GDP has reached $4 trillion, Mint reported, placing it behind only the United States, China, and Germany.

This development aligns with projections made by the International Monetary Fund (IMF) in its April 2025 World Economic Outlook report, which anticipated India’s GDP surpassing Japan’s in 2025. The IMF estimated India’s nominal GDP at $4.19 trillion, slightly ahead of Japan’s $4.18 trillion.

Subrahmanyam attributed this milestone to favorable geopolitical dynamics and robust economic conditions currently benefiting India.

He also projected that India could surpass Germany to become the third-largest economy within the next 2.5 to 3 years, provided current economic strategies continue effectively.

India’s economic ascent is supported by various factors, including a growing domestic market, increased foreign direct investment, and advancements in technology and infrastructure. The country’s economic growth has also been bolstered by government initiatives such as Made In India initiative and more, aimed at improving the business environment and promoting manufacturing and exports.

Top 5 High GDP Countries

Here’s a data chart comparing India with other countries in the top 5 high GDP countries list:

While India’s overall GDP has seen significant growth to make it the 4th largest economy in the world, challenges remain in terms of per capita income and income inequality.

According to the IMF, India’s per capita income has doubled from $1,438 in 2013-14 to $2,880 in 2025.

However, this figure still lags behind those of other major economies, indicating room for improvement in wealth distribution and economic inclusivity.

As India continues on its growth trajectory, policymakers and economists emphasize the importance of sustaining economic reforms, enhancing human capital, and addressing structural challenges to ensure long-term, inclusive development.