India Surpasses Japan To Become World's Fourth Largest Economy, Says Government

India has surpassed Japan to become the world's fourth-largest economy with a size of $4.18 trillion, and is poised to overtake Germany to become the third-largest by 2030, the government has said. With continuing good growth numbers, India is also the world's fastest-growing major economy.

India's real GDP grew 8.2% in the second quarter of 2025-26, up from 7.8% in the first quarter and 7.4% in the fourth quarter of the last fiscal.

'With GDP valued at $4.18 trillion, India has surpassed Japan to become the world's fourth-largest economy, and is poised to displace Germany from the third rank in the next 2.5 to 3 years with a projected GDP of $7.3 trillion by 2030,' according to a government release providing a snapshot of reforms in 2025.

The US is the world's largest economy, and China occupies the second spot.

The growth momentum further surprised on the upside, with GDP expanding to a six-quarter high in Q2 of 2025-26, reflecting India's resilience amid persistent global trade uncertainties, it said.

Domestic drivers, led by robust private consumption, played a central role in supporting this expansion. The release further said international agencies have echoed this optimism and cited projections made by various entities.

The World Bank has projected a 6.5% growth in 2026; Moody's expects India to remain the fastest-growing G20 economy with a growth of 6.4% in 2026 and 6.5% in 2027.

The IMF has raised its projections to 6.6% for 2025 and 6.2% for 2026; the OECD forecasts 6.7% growth in 2025 and 6.2% in 2026.

Also, S&P anticipates a growth of 6.5% in the current fiscal and 6.7% in the next; the Asian Development Bank has lifted its 2025 forecast to 7.2%; and Fitch has raised its FY26 projection to 7.4% on stronger consumer demand.

'India is among the world's fastest-growing major economies and is well-positioned to sustain this momentum. With the ambition of attaining high middle-income status by 2047- the centenary year of its independence, the country is building on strong foundations of economic growth, structural reforms, and social progress,' the government said.

The release also highlighted that inflation remains below the lower tolerance threshold, unemployment is on a declining trajectory, and export performance continues to improve.

Furthermore, financial conditions have stayed benign, with strong credit flows to the commercial sector, while demand conditions remain firm, supported by a further strengthening of urban consumption.