ECONOMY
India’s $4.18-trillion GDP races past Japan’s to become world’s fourth-largest economy
- IBJ Bureau
- Dec 31, 2025
India has overtaken Japan as the world’s fourth-largest economy, the government’s end-of-year economic review calculation shows.
Official confirmation, however, depends on data due in 2026, when final annual Gross Domestic Product (GDP) figures are released. The International Monetary Fund (IMF) had earlier suggested that India would cross over Japan next year.
“India is among the world’s fastest-growing major economies and is well positioned to sustain this momentum,” notes the government’s economic briefing, which was released late on Monday.
“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 two-and-a-half to three years, with projected GDP of $7.3 trillion by 2030,” the briefing has said.
The IMF projections for 2026 have put India’s economy at $4.51 trillion, compared with Japan’s $4.46 trillion.
The upbeat assessment comes despite economic worries after Washington in August hit New Delhi with huge tariffs over its purchases of Russian oil.
India’s GDP per capita was $2,694 in 2024, according to the latest World Bank figures, 12 times smaller than Japan’s $32,487 and 20 times smaller than Germany’s $56,103.
More than a quarter of India’s 140 crore people are aged between 10 and 26, according to government figures, and the country is already struggling to generate well-paid jobs for crores of young graduates.
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