PrintKhabar Team
In a historic achievement, India becomes world’s 4th largest economy, surpassing Japan in 2025, marking a significant milestone for the Indian economy. According to the International Monetary Fund’s (IMF) World Economic Outlook April 2025, India’s GDP is projected to reach $4.187 trillion, edging past Japan’s estimated $4.186 trillion, securing India’s position as the 4th largest economy India globally. This article explores India’s rise among the largest economies in the world, its economic trajectory, and what this means for the future, including projections for the largest economies in the world 2050.
Is India the Fourth-Largest Economy?
Yes, India is the fourth-largest economy in 2025, as confirmed by IMF data. NITI Aayog CEO B.V.R. Subrahmanyam announced, “We are the fourth-largest economy as I speak. We are a USD 4 trillion economy,” citing IMF figures. India’s GDP of $4.187 trillion narrowly surpasses Japan’s $4.186 trillion, pushing Japan to the 5th largest economy in the world. This shift highlights India’s robust economic growth, driven by sectors like technology, manufacturing, agriculture, and services.
Is India in the Top 5 Economies?
Absolutely, India is in the top 5 economies and has now climbed to the fourth spot in 2025. Prior to this, India held the fifth position, having overtaken the United Kingdom in 2022. The top 5 economies in the world in 2025, based on nominal GDP, are:
- United States – $30.51 trillion
- China – $19.23 trillion
- Germany – $4.74 trillion
- India – $4.187 trillion
- Japan – $4.186 trillion
India’s ascent to the 4th largest economy India reflects its rapid growth, with a GDP growth rate of 6.2% projected for 2025, outpacing many major economies.
Will India Become the 3rd Largest Economy?
Projections indicate that India is on track to become the world’s third-largest economy by 2027 or 2028. The IMF forecasts India’s GDP to reach $5.584 trillion by 2028, surpassing Germany’s projected $5.251 trillion. NITI Aayog’s Subrahmanyam stated that with sustained reforms, India could achieve this milestone in just 2.5 to 3 years. Factors driving this growth include:
- Robust domestic demand: A growing middle class and increasing consumer spending.
- Structural reforms: Policies like Make in India, GST, and infrastructure investments.
- Favorable demographics: A youthful, skilled workforce.
- Technology and innovation: Growth in IT, AI, and digital services.
By 2030, India’s Indian economy in trillion is expected to reach $7 trillion, solidifying its position among the largest economies in the world.
The Rise of the Indian Economy
India’s journey to becoming the 4th largest economy India is remarkable. A decade ago, in 2015, India was the 10th largest economy with a GDP of $2.1 trillion. By 2025, the Indian economy has doubled to $4.187 trillion, a 105% growth, outpacing the United States (66%) and China (77%) over the same period. Key contributors to this growth include:
- Manufacturing and exports: Initiatives like Make in India and Production Linked Incentive (PLI) schemes have boosted manufacturing.
- Digitalization: Widespread adoption of technology has enhanced transparency and reduced costs.
- Infrastructure development: Investments of over $100 billion annually in roads, airports, and metros.
- Service sector: IT and business outsourcing remain major drivers, with service exports growing exponentially.
Per Capita Income of India
While India’s nominal GDP places it among the top 5 economies in the world, its per capita income of India remains relatively low due to its vast population of over 1.4 billion. In 2025, India’s per capita income is estimated at $2,880, up from $1,438 in 2013-14. This is significantly lower than developed economies like the United States ($80,000+) or Japan ($33,000+). However, India’s per capita income has grown by 188% over the past decade, reflecting improving living standards.
On a purchasing power parity (PPP) basis, India ranks as the third-largest economy, highlighting the affordability of goods and services within the country. For example, $10 in the U.S. might buy one shirt, while ₹200 (about $2.5) can buy a similar shirt in India, showcasing stronger purchasing power locally.
India vs. Japan: A Historic Overtake
India’s surpassing of Japan to become the India 4th largest economy is a pivotal moment. Japan, long known for its advanced technology and manufacturing prowess, has faced challenges like a declining population and economic stagnation, with its GDP remaining nearly flat at $4.4 trillion from 2015 to 2025. In contrast, India’s dynamic growth, fueled by a young workforce and government reforms, has propelled it past Japan.
In 2022, India already overtook Japan in domestic car sales, signaling its rising economic clout. The IMF notes that a weakening yen has accelerated India’s ascent, making 2025 a landmark year for the Indian economy.
Challenges for the Indian Economy
Despite its achievements, the Indian economy faces challenges:
- Low per capita income: At $2,880, India lags behind developed nations, indicating a need for equitable growth.
- Job creation: With a labor force participation rate of 49.6% and a female participation rate of 24.1%, creating productive employment is critical.
- Education and skills: A quarter of Indian youth aged 14-18 struggle with basic literacy, necessitating investment in education to compete in an AI-driven world.
- Global trade uncertainties: U.S. tariffs and geopolitical tensions could impact India’s export-driven growth.
Largest Economies in the World 2050: India’s Future Outlook
Looking ahead, India’s trajectory suggests it will remain among the largest economies in the world 2050. The IMF projects India’s GDP to grow steadily, potentially reaching $26 trillion by 2048 in market exchange rate terms. In PPP terms, India could narrow the gap with the U.S., becoming 1.7 times smaller than the U.S. economy by 2027. Key factors for sustained growth include:
- Demographic dividend: India’s young population will drive consumption and innovation.
- AI and technology: Leveraging AI and Generative AI to enhance productivity.
- Sustainability: Adopting green technologies to address environmental challenges.
- Global supply chains: Positioning India as a manufacturing hub amid shifting geopolitical dynamics.
Why India’s Rise Matters
India’s rise to the 4th largest economy India is more than a statistical achievement; it reflects the country’s growing influence in global trade, technology, and geopolitics. The Indian economy is becoming a key player in global supply chains, attracting investments from companies like Apple and Samsung. With a projected growth rate of 6.2% in 2025, India remains the fastest-growing major economy, setting the stage for it to become a $5 trillion economy by 2027 and potentially a $7 trillion economy by 2030.
Conclusion
India becomes world’s 4th largest economy, surpassing Japan, marking a defining moment in its economic journey. As the 4th largest economy India, it stands behind only the U.S., China, and Germany, with projections to overtake Germany by 2028. While challenges like low per capita income of India and job creation persist, India’s rapid growth, driven by reforms, technology, and a youthful population, positions it as a global economic powerhouse. By 2050, India is poised to be a leader among the largest economies in the world, shaping the future of the global economy.
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