- By Shibra Arshad
- Wed, 31 Dec 2025 10:17 AM (IST)
- Source:JND
Indian Economy: India has become the world's fourth-largest economy, leaving Japan behind, the government announced on Tuesday. As India is the world's fastest-growing major economy with a size of USD 4.18 trillion, it is likely to surpass Germany and become the world’s third-largest economy by the year 2028.
The list of the world’s largest economies has been updated, with India and Japan switching places. The United States is the world’s largest economy, followed by China and Germany.
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“With GDP valued at USD 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 2.5 to 3 years with a projected GDP of USD 7.3 trillion by 2030,” the release by the Press Information Bureau stated.
As per the release, the growth was ‘led by resilient domestic demand amidst global trade and policy uncertainties’. The latest government data shows India's real Gross Domestic Product (GDP) grew by 8.2 per cent in the second quarter of FY 2025-26. This marks an improvement from 7.8 per cent growth in the first quarter and 7.4 per cent in the fourth quarter of FY 2024-25.
“Domestic drivers-led by robust private consumption-played a central role in supporting this expansion,” the government said.
The statement noted that the Reserve Bank of India (RBI) has raised its GDP growth forecast for FY 2025–26 from 6.8 per cent to 7.3 per cent. It also pointed to upward revisions in growth projections by various international agencies.
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“The World Bank projects 6.5% growth in 2026; Moody’s expects India to remain the fastest-growing G20 economy with growth of 6.4% in 2026 and 6.5% in 2027; the IMF has raised its projections to 6.6% for 2025 and 6.2% for 2026; the OECD forecasts 6.7% growth in 2025 and 6.2% in 2026; S&P anticipates growth of 6.5% in the current fiscal and 6.7% in the next; the Asian Development Bank has lifted its 2025 forecast to 7.2%; and Fitch has raised its FY26 projection to 7.4% on stronger consumer demand,” the release states.