India has overtaken Japan as the world’s fourth largest economy and officials hope to pass Germany within three years, the government’s end-of-year economic review revealed.
Official confirmation, however, depends on data due in 2026 when final annual gross domestic product figures are released, with the International Monetary Fund (IMF) suggesting India will cross over Japan next year, reported AFP.
“India is among the world’s fastest-growing major economies and is well-positioned to sustain this momentum,” read the government economic briefing note, 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.”
IMF projections for 2026 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 India with huge tariffs over its purchases of Russian oil.
New Delhi said continued growth reflects its “resilience amid persistent global trade uncertainties”. But other measurements offer a less rosy outlook.
In terms of population, India overtook neighboring China as the most populous nation in 2023.
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.
Government figures show that more than a quarter of India's 1.4 billion people are aged between 10 and 26. Creating enough well-paid jobs for millions of young graduates is an upcoming hurdle, but the report offered a rosy outlook.
“As one of the world's youngest nations, India's growth story is being shaped by its ability to generate quality employment that productively absorbs its expanding workforce and delivers inclusive, sustainable growth,” a note in the review said.
India’s Prime Minister Narendra Modi this year unveiled sweeping consumption tax cuts and pushed through labor law reforms after growth slowed to a four-year low in the 12 months ending March 31.
Currency pressures have also mounted.
The rupee hit a record low against the dollar in early December, after falling about 5% in 2025.
That came amid concerns over the lack of a trade deal with Washington and the impact of higher levies on Indian goods.
India became the world's fifth largest economy in 2022, when its GDP overtook that of former colonial ruler Britain, according to IMF figures.
