Hyderabad: In a historic milestone, India has overtaken Japan to become the world’s fourth-largest economy in 2025, with a nominal GDP of $4.187 trillion, edging out Japan’s $4.186 trillion, according to the International Monetary Fund’s (IMF) April 2025 World Economic Outlook. This achievement follows India’s ascent from the fifth-largest economy in 2024, when its GDP stood at $3.9 trillion, marking a significant leap in its global economic standing.
The IMF projects India’s GDP to grow at an impressive 6.2% in 2025, driven by robust domestic consumption, particularly in rural areas, making it the fastest-growing major economy. Key sectors such as automotive, technology, and infrastructure have been pivotal, bolstered by government reforms, including tax simplifications and infrastructure investments. The burgeoning middle class, now over 300 million strong, has further fueled demand for goods and services, from smartphones to electric vehicles.
India’s economic rise is not without challenges. Despite its GDP growth, the per capita income remains low at $2,880 in 2025, reflecting income inequality and structural hurdles. Limited female workforce participation, at just 23%, continues to hinder inclusive growth. Addressing these issues is critical as India aims to surpass Germany by 2028 to become the third-largest economy, with a projected GDP of $5.584 trillion, and targets a $5 trillion economy by 2027.
Prime Minister Narendra Modi hailed the achievement, stating, “This is a testament to India’s resilience and reforms, positioning us as a global economic powerhouse.” Analysts attribute India’s success to its young workforce and digital transformation, with initiatives like Digital India enhancing connectivity.
