India has overtaken Japan to emerge as the world’s fourth-largest economy, with a GDP of USD 4.18 trillion, the government said, underscoring the country’s strong growth momentum despite ongoing global uncertainties.

With sustained economic expansion, India is now on track to surpass Germany and secure the third position globally by 2030.

According to a government release highlighting key reforms in 2025, India’s economy is projected to reach USD 7.3 trillion by the end of the decade. The United States continues to be the world’s largest economy, followed by China in second place.

Growth Momentum Defies Global Headwinds

India remains the fastest-growing major economy in the world. Real GDP growth accelerated to 8.2 per cent in the second quarter of 2025–26, up from 7.8 per cent in the first quarter and 7.4 per cent in the final quarter of the previous fiscal year. This marks a six-quarter high, reflecting the economy’s resilience amid persistent global trade challenges.

The government attributed the robust performance primarily to strong domestic drivers, particularly private consumption. International agencies have also expressed optimism about India’s outlook. The World Bank has projected a growth rate of 6.5 per cent for 2026, while the International Monetary Fund has raised its forecast to 6.6 per cent for 2025. Moody’s has likewise indicated that India is expected to remain the fastest-growing economy among G20 nations.

The release further highlighted easing inflation, falling unemployment levels, improving export performance, and strong credit growth, supported by sustained demand and strengthening urban consumption.​​​​​​​