In a milestone moment for the Indian economy, official data and projections indicate that India has surpassed Japan to become the world’s fourth-largest economy, a result of strong growth momentum, robust domestic demand, and strategic economic reforms. With a nominal Gross Domestic Product (GDP) estimated at around USD 4.18 trillion in 2025, India is now ranked fourth globally, trailing only the United States, China, and Germany in size.

The shift in rankings reflects decades of economic transformation driven by liberalisation, digital and manufacturing reforms, and one of the world’s most dynamic young labour forces. India’s rise in the global economic order has been steady, moving from the eleventh largest economy in 1990 to the fifth in recent years, ahead of major developed countries such as the United Kingdom before overtaking Japan.

According to government releases and international forecasts, the Indian economy’s recent performance has been marked by accelerating GDP growth. Official figures show that India’s real GDP expanded by 8.2 per cent in the second quarter of the 2025–26 fiscal year, up from 7.8 per cent in the previous quarter and 7.4 per cent in the final quarter of 2024–25, led by resilient domestic consumption and expanding services and industrial activity.

The government’s year-end economic review highlighted that with a GDP valued at USD 4.18 trillion, India has overtaken Japan and is poised to move into the third spot globally in the next 2.5 to 3 years if current growth continues. Projections suggest India’s GDP could reach as high as USD 7.3 trillion by 2030, potentially placing it above Germany and reinforcing its position as a dominant economic power.

India’s ascent has drawn wide attention from business leaders and economists. Industry figures such as Anand Mahindra noted that overtaking Japan, long considered an economic powerhouse, is “no small achievement,” underlining the country’s rapid rise driven by entrepreneurial energy and large-scale reforms. He also stressed that while the milestone is significant, continued focus on per capita income and inclusive development will be critical for sustained progress.

The achievement also reflects broader global economic shifts. Japan’s economy has faced challenges from demographic decline and slower growth rates, while India’s younger population, expanding middle class, and increasing integration into global trade and technology supply chains have helped boost its economic trajectory. International agencies, including the International Monetary Fund (IMF), World Bank, and rating agencies like Moody’s and Fitch, have projected continued GDP growth for India over the next several years.

Despite this success, some analysts caution that headline GDP figures do not fully capture underlying economic welfare, such as per capita income, where India still lags significantly behind Japan. They argue that while India’s total economic output now ranks fourth, focus on quality of growth, productivity improvements, and equitable income distribution remains essential.

For now, India’s leap past Japan into the fourth position underscores a transformative economic journey and a rapidly evolving role in global economic leadership. As India continues to expand its industrial base, innovate in technology and services, and enhance global trade relations, its trajectory toward becoming one of the world’s top three economies appears increasingly plausible.