India is poised to surpass Japan, becoming the world’s fourth-largest economy by 2025, according to the latest International Monetary Fund (IMF) data released in April. The IMF projected India’s nominal GDP to reach $4.187 trillion, just ahead of Japan’s $4.186 trillion.
This marks a significant shift from 2024, when India was the fifth-largest economy, with a GDP of $3.9 trillion, trailing Japan’s $4.1 trillion. The Indian economy’s expansion underscores its rapid growth, which has consistently outpaced other major economies.
The IMF’s World Economic Outlook from April 2025 showed India’s growth trajectory, predicting a 6.3% real-term increase in 2025, down slightly from an earlier forecast of 6.5%.
Despite this revision, India remains the fastest-growing major economy, with further projections indicating a growth rate of 6.2% in 2025 and 6.3% in 2026. In contrast, Japan’s economy is expected to grow by just 0.6% in 2025, reflecting a more modest economic performance. These projections highlight the diverging economic paths of the two nations.
The global economic landscape is being reshaped by India’s accelerated growth, which provides it with a considerable advantage over regional and international counterparts. The IMF’s data suggested that India’s robust economic performance will continue, driven by strong domestic demand and favourable demographic trends. The anticipated growth comes amid global economic uncertainties, including trade tensions and policy shifts that have impacted many developed economies, including Japan.
Japan’s economic outlook has been hampered by external pressures, notably from ongoing trade conflicts. The IMF recently downgraded Japan’s 2025 growth projection to 0.6% from 1.1% in its January forecast, reflecting the negative impact of increased tariffs, particularly those imposed by the United States.
This economic challenge is compounded by Japan’s ageing population and shrinking workforce, which pose long-term structural issues for sustained growth. These factors contribute to Japan’s relatively stagnant economic advancement compared to India’s dynamic development.
India’s rise to the position of the fourth-largest economy signals a broader shift in the global economic order. According to IMF projections, India’s economy is anticipated to be 20% larger than Germany’s by 2030, reaching $6.8 trillion, and more than 33% larger than Japan’s. In 2020, India overtook the UK to become the fifth-largest economy. The International Monetary Fund forecasts a 10.1% growth in the economy over the next four years.
