New Delhi: India has overtaken Japan to become the world’s fourth-largest economy, with gross domestic product valued at $4.18 trillion, and is on track to surpass Germany to claim the third position by the end of the decade, the government said in a release outlining key economic indicators and reform outcomes for 2025.
According to the snapshot, India’s economy is projected to expand to $7.3 trillion by 2030, which would place it behind only the United States and China, currently the world’s largest and second-largest economies respectively. The government noted that India also continues to be the fastest-growing major economy globally.
Recent growth data point to a strengthening momentum. Real GDP grew 8.2 per cent in the second quarter of 2025-26, marking a six-quarter high. This followed growth of 7.8 per cent in the first quarter of the current fiscal and 7.4 per cent in the fourth quarter of the previous year. The release said the latest expansion exceeded expectations despite ongoing global trade uncertainties.
“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,” the statement said. It added that domestic drivers, particularly robust private consumption, have played a central role in supporting growth.
The government cited projections from several international agencies that have reinforced the positive outlook. The World Bank has forecast growth of 6.5 per cent in 2026. Moody’s expects India to remain the fastest-growing G20 economy, with growth of 6.4 per cent in 2026 and 6.5 per cent in 2027. The International Monetary Fund has raised its estimates to 6.6 per cent for 2025 and 6.2 per cent for 2026, while the Organisation for Economic Co-operation and Development sees growth of 6.7 per cent in 2025 and 6.2 per cent in 2026.
In addition, S&P Global Ratings 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 Ratings 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, adding that the country aims to attain high middle-income status by 2047, the centenary of its independence.
The release also pointed to easing inflation, which remains below the lower tolerance threshold, a declining unemployment trend, improving export performance and benign financial conditions marked by strong credit flows to the commercial sector. Urban consumption has continued to strengthen, supporting firm demand conditions across the economy.