India has overtaken Japan to become the world’s fourth-largest economy, the government announced on Tuesday. With a GDP of USD 4.18 trillion, India is also the fastest-growing major economy globally and is on track to surpass Germany to claim the third position by 2028.
The United States continues to lead as the world’s largest economy, followed by China in second place. According to a Press Information Bureau (PIB) release highlighting key reforms in 2025, India’s GDP is projected to reach USD 7.3 trillion by 2030, enabling it to displace Germany from the third rank within the next 2.5 to 3 years.
The government noted that India’s real Gross Domestic Product (GDP) grew by 8.2% in the second quarter of FY 2025–26, up from 7.8% in the first quarter and 7.4% in the fourth quarter of FY 2024–25. This marked a six-quarter high, driven primarily by resilient domestic demand despite global trade and policy uncertainties.
“Domestic drivers, led by robust private consumption, played a central role in supporting this expansion,” the government said, adding that strong internal demand continues to cushion the economy amid external challenges.
Reflecting the positive outlook, the Reserve Bank of India (RBI) has revised its GDP growth forecast for FY 2025–26 upward from 6.8% to 7.3%. Several international agencies have also expressed confidence in India’s growth trajectory. The World Bank projects 6.5% growth in 2026, while Moody’s expects India to remain the fastest-growing G20 economy, with growth of 6.4% in 2026 and 6.5% in 2027.
The International Monetary Fund (IMF) has raised its projections to 6.6% for 2025 and 6.2% for 2026. The OECD forecasts growth of 6.7% in 2025 and 6.2% in 2026, while S&P anticipates 6.5% growth in the current fiscal year and 6.7% in the next. The Asian Development Bank has increased its 2025 forecast to 7.2%, and Fitch has raised its FY26 projection to 7.4%, citing stronger consumer demand.
