In a remarkable milestone that underscores its growing economic strength, India has officially become the world’s fourth-largest economy, overtaking Japan — according to recent statements by members of the Economic Advisory Council to the Prime Minister (EAC-PM) and projections by global financial institutions like the International Monetary Fund (IMF).
A New Era of Economic Power
Shamika Ravi, a member of the EAC-PM, recently stated on social media that India now ranks fourth globally in terms of GDP, despite a large part of its informal economy not being captured in official numbers. This informal sector, which plays a major role in India’s economic activity, makes the achievement even more significant.
This view was echoed by NITI Aayog member and former Chief Economic Adviser Arvind Virmani, who had earlier projected that India would climb to the fourth spot by the end of 2025. However, NITI Aayog CEO BVR Subrahmanyam stirred the conversation last month by claiming that India has already overtaken Japan, a statement he backed with data from the IMF.
“We are a USD 4 trillion economy as I speak,” Subrahmanyam said on May 30.
“It is only the US, China, and Germany that are now larger than India.”
IMF Projections Support the Claim
The IMF’s World Economic Outlook (April 2024) supports this shift, projecting India’s nominal GDP to reach USD 4.19 trillion in 2025, just edging out Japan’s projected GDP of USD 4.186 trillion. These are close numbers, but they signal a changing tide in global economic rankings.
GDP Growth: Strong and Resilient
India’s Chief Economic Adviser V Anantha Nageswaran confirmed that the Finance Ministry’s internal projections align with the IMF’s estimates. According to him, India’s GDP for FY25 is expected to be USD 3.9 trillion, which means the economy is right on track.
Still, there’s a note of caution: while India is clearly in the process of becoming the fourth-largest economy, Virmani stressed that full confirmation will require complete data for the fiscal year. “So till then, it remains a forecast,” he said.
Rising Per Capita Income
Another noteworthy highlight is India’s rising per capita income. According to IMF data, it has doubled over the past decade, growing from USD 1,438 in 2013-14 to USD 2,880 in 2025. While this is still far behind developed nations, it reflects a steady improvement in individual prosperity across the country.
What Lies Ahead?
India’s momentum doesn’t stop here. Subrahmanyam has boldly projected that India could become the third-largest economy in the world within the next 2.5 to 3 years, surpassing Germany. If the current trajectory holds, only the US and China will stand ahead of India in terms of GDP size.
This shift is more than symbolic—it represents growing investment confidence, rising entrepreneurship, and the structural strength of the Indian economy. With policy reforms, infrastructure development, and a digital revolution underway, India’s economic story seems poised for even greater heights.
