NEW DELHI (Diya TV) — India has overtaken Japan to become the world’s fourth-largest economy, marking a major milestone in its rapid economic rise. With a gross domestic product valued at about $4.18 trillion, India now ranks behind only the United States, China, and Germany. Government projections say the country is on track to surpass Germany and claim the third spot by 2030.
The Indian government confirmed the development in its end-of-year economic review for 2025. The review said India’s economy has expanded faster than most major economies despite global trade uncertainty and geopolitical risks. Officials said strong domestic demand has driven growth. Private consumption led the expansion, supported by rising incomes and resilient urban spending. As a result, India remains the world’s fastest-growing major economy.
India’s rise above Japan reflects years of steady reforms, higher investment, and a large consumer base. On current trends, the government expects India’s GDP to reach $7.3 trillion by 2030. At that level, only the U.S. and China would have larger economies.
India’s real GDP grew 8.2% in the second quarter of the 2025–26 financial year. The figure marked a six-quarter high. Growth had stood at 7.8% in the first quarter and 7.4% in the final quarter of the previous fiscal year.
The government said the rebound showed India’s resilience at a time when many economies faced slowing growth. Domestic factors played a key role. Households increased spending, while credit flows to businesses remained strong. Financial conditions also stayed stable. Banks continued to lend, and demand conditions remained firm. Officials said urban consumption strengthened further during the quarter.
Major global institutions have echoed India’s growth story. The World Bank has projected 6.5% growth in 2026. Moody’s expects India to remain the fastest-growing G20 economy, with growth of 6.4% in 2026 and 6.5% in 2027. The International Monetary Fund raised its forecast to 6.6% for 2025 and 6.2% for 2026. The Organisation for Economic Co-operation and Development expects growth of 6.7% in 2025 and 6.2% in 2026.
S&P Global Ratings sees growth of 6.5% in the current fiscal year and 6.7% in the next. The Asian Development Bank raised its 2025 forecast to 7.2%. Fitch Ratings lifted its projection for 2025–26 to 7.4%, citing stronger consumer demand. The Reserve Bank of India also revised its growth forecast upward. It now expects the economy to expand by 7.3% in the current financial year.
The economic review said India’s export performance has improved. Merchandise exports rose to $38.13 billion in November, up from $36.43 billion in January. Engineering goods, electronics, pharmaceuticals, and petroleum products led the gains. Officials said inflation has remained below the lower tolerance threshold. That trend has helped protect household purchasing power. The government also reported a decline in unemployment, signaling better labor market conditions.
Credit growth to the commercial sector stayed strong. Businesses continued to invest, while consumers kept spending. These factors helped sustain overall economic momentum. While the government says India has already surpassed Japan, official confirmation will depend on final GDP data due in 2026. The International Monetary Fund has suggested India may overtake Japan next year based on its own calculations.
Even so, the long-term direction appears clear. On current trends, India is expected to surpass Germany within the next three years. That shift would make India the world’s third-largest economy. Looking ahead, the government has set an ambitious goal. It aims for India to reach high middle-income status by 2047, the centenary year of independence. Officials said strong growth, structural reforms, and social progress form the foundation for that vision.
