India is poised to become the world’s fourth-largest economy in 2025, overtaking its nearest rival Japan, according to the latest edition of the International Monetary Fund’s World Economic Outlook. India’s nominal GDP is projected to reach $4,187.02 billion in 2025, edging past Japan’s estimated $4,186.43 billion.

India is also on track to surpass Germany and claim the position of the third-largest economy by 2028. The IMF forecasts India’s GDP to rise to $5,584.48 billion by then, outpacing Germany’s projected $5,251.93 billion.  

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Prime Minister Narendra Modi’s ambitious vision of a $5 trillion economy appears well within reach, with the target likely to be achieved as early as 2027, the report indicates.

The United States and China are set to retain the top two spots in 2025 as well. According to the IMF report, the United States will remain in first place with a GDP of $30.5 trillion, while China will be in second place with an economy of $19.2 trillion.

 The trend shows these countries would remain the world's two largest economies through the decade.  

The IMF also said the economic system, which flourished for over 80 years, is now changing and a major revamp is likely in the coming years. A new economic order is emerging and India's role could become even more crucial in the coming years.

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The IMF has revised India's GDP growth forecast for 2025 to 6.2 per cent, down from its earlier estimate of 6.5 per cent made in the January outlook report. This may be attributed to several global uncertainties, including the tariff war initiated by the United States.