India has surpassed Japan to become the world’s fourth-largest economy, with a gross domestic product (GDP) of USD 4.18 trillion, the government said, underlining the country’s strong growth momentum and rising global economic stature.
According to an official release providing a snapshot of reforms and economic performance in 2025, India is now poised to overtake Germany to become the world’s third-largest economy within the next 2.5 to 3 years. The government projects India’s GDP to reach USD 7.3 trillion by 2030.
The United States remains the world’s largest economy, followed by China in second place.
India also continues to be the fastest-growing major economy globally. Real GDP growth accelerated to 8.2 per cent in the second quarter of FY 2025-26, compared with 7.8 per cent in the first quarter and 7.4 per cent in the fourth quarter of the previous fiscal. This marks a six-quarter high, reflecting the economy’s resilience despite persistent global trade uncertainties.
The government noted that domestic drivers, particularly robust private consumption, played a central role in supporting the expansion. Urban consumption strengthened further, while demand conditions remained firm across sectors.
International agencies have echoed this optimism. The World Bank has projected India’s growth at 6.5 per cent in 2026. Moody’s expects India to remain the fastest-growing G20 economy, forecasting growth of 6.4 per cent in 2026 and 6.5 per cent in 2027. The International Monetary Fund (IMF) has raised its projections to 6.6 per cent for 2025 and 6.2 per cent for 2026.
Similarly, the OECD forecasts growth of 6.7 per cent in 2025 and 6.2 per cent in 2026. S&P anticipates growth of 6.5 per cent in the current fiscal and 6.7 per cent in the next. The Asian Development Bank has lifted its 2025 forecast to 7.2 per cent, while Fitch has raised its FY26 projection to 7.4 per cent, citing stronger consumer demand.
“India is among the world’s fastest-growing major economies and is well-positioned to sustain this momentum,” the government said. It added that with the ambition of attaining high middle-income status by 2047—the centenary year of Independence—the country is building on strong foundations of economic growth, structural reforms and social progress.
The release also highlighted that inflation remains below the lower tolerance threshold, unemployment is on a declining trajectory, and export performance continues to improve. Financial conditions have stayed benign, supported by strong credit flows to the commercial sector, reinforcing confidence in India’s medium- to long-term growth outlook.