India Becomes World’s 4th Largest Economy, Surpasses Japan: IMF

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4th largest economy

Key Points

  • India surpasses Japan to become the world’s fourth largest economy, with a GDP of $4.187 trillion.
  • Now ranks behind only the USA, China, and Germany in terms of nominal GDP.
  • IMF projects India’s growth at 6.2% in 2025 and 6.3% in 2026, despite a slight downward revision.
  • India’s GDP per capita remains low at $2,850–2,900, ranking 144th globally.
  • IMF forecasts slower growth for China and other emerging economies in the coming decades.

New Delhi: India has officially surpassed Japan to become the world’s fourth largest economy, according to the latest data from the International Monetary Fund (IMF). The announcement was made by NITI Aayog CEO BVR Subrahmanyam, who hailed the achievement as a testament to India’s robust economic momentum.

As per IMF’s April 2025 World Economic Outlook, India’s nominal GDP stands at $4.187 trillion, edging past Japan’s $4.186 trillion. This leap cements India’s position as a major global economic powerhouse.

Top 5 World Economies by GDP (2025, IMF Data)

  1. United States: $30.51 trillion
  2. China: $19.23 trillion
  3. Germany: $4.74 trillion
  4. India: $4.187 trillion
  5. Japan: $4.186 trillion
  6. UK: $3.38 trillion

For perspective, the US economy remains the world’s largest, with a GDP nearly seven times that of India.

IMF’s Growth Outlook: India Remains a Global Bright Spot

The IMF forecasts that India’s economy will continue to outpace most major economies, growing at 6.2% in 2025 and 6.3% in 2026. While these figures are slightly lower than earlier projections due to global trade tensions and rising uncertainty, India’s growth rate remains among the fastest in the world.

GDP Per Capita: A Challenge Amid Progress

Despite its impressive GDP size, India’s per capita income tells a different story. With a per capita GDP of just $2,850–2,900, India ranks 144th globally far behind smaller, wealthier nations. For comparison, the top three countries by per capita GDP are:

  • Luxembourg: $141,080
  • Switzerland: $111,716
  • Ireland: $107,243

This highlights the uneven distribution of wealth and the ongoing need for inclusive growth.

Global Economic Trends: China’s Slowdown, India’s Opportunity

The IMF’s long-term outlook notes that China is expected to see a sharp decline in growth over the next 25 years, with a projected slowdown of 2.7 percentage points compared to its 2016–18 average. This is attributed to adverse demographics and the end of rapid catch-up growth.

India, meanwhile, is expected to experience a smaller growth decline of about 0.7 percentage points between 2025 and 2050. However, the IMF warns that as India reaches its own demographic turning point in the latter half of the century, growth could slow further.

What’s Next for India?

India’s rise to the fourth spot is a significant achievement, but challenges remain. To sustain its momentum, India must focus on:

  • Improving per capita income and reducing inequality
  • Investing in education, healthcare, and infrastructure
  • Navigating global economic headwinds and demographic shifts
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