India overtakes Japan to become world’s 4th largest economy: Niti Aayog CEO
New Delhi: India has surpassed Japan to emerge as the fourth largest economy globally, Niti Aayog CEO BVR Subrahmanyam announced on Saturday. Speaking after the 10th Governing Council meeting of the policy think tank, Subrahmanyam said, “We are the fourth largest economy as I speak. We are a $4 trillion economy as I speak.”
Quoting International Monetary Fund (IMF) data, he stated that India’s economy now stands larger than Japan’s, leaving only the United States, China, and Germany ahead.
“It is only US, China, Germany, which are larger than India and if we stick to what is being planned and what is being thought through, in 2.5-3 years, we will be the third largest economy,” Subrahmanyam added.
As per IMF figures, India’s GDP at current prices has reached $4.187 trillion, narrowly overtaking Japan’s $4.186 trillion.
However, India continues to lag significantly in per capita GDP, with Japan at $33,960 compared to India’s $2,880.
Germany, now at the third spot ahead of India, has a GDP of $4.74 trillion and a per capita income of $55,910, IMF data shows.
This milestone aligns with Prime Minister Narendra Modi’s 2024 declaration that India would become the third-largest economy during his third term.
PM Modi returned to power after the 2024 Lok Sabha elections, where the BJP-led alliance won 240 seats.
At a post-Budget industry event earlier, Modi had remarked, “When we came to power in 2014, the biggest question was how to bring the economy back on track. The situation was fragile before 2014, there were scams worth lakhs of crores. We have pulled the Indian economy from a very sensitive place.” He added that India was the fifth largest economy then and assured that becoming the third largest was not far off.
Finance Minister Nirmala Sitharaman had echoed this optimism in May 2024, asserting that India would likely become the third-largest economy by 2025.
Top economies ahead of India
Currently, only three countries are ahead of India in terms of GDP:
United States: $30.51 trillion
China: $19.23 trillion
Germany: $4.74 trillion
According to IMF data, the US economy is roughly seven times the size of India’s.
Outlook and per capita standing
Despite the rise in GDP, India ranks poorly in per capita income, holding the 144th position globally with a per capita GDP of around $2,850–$2,900. In contrast, the top three countries by per capita GDP are Luxembourg ($141,080), Switzerland ($111,716), and Ireland ($107,243).
Future projections
In the April 2025 edition of the IMF’s World Economic Outlook, India’s GDP is projected to grow by 6.2% in 2025 and 6.3% in 2026, outpacing most global and regional economies.
However, this represents a slight downgrade from the January forecast, attributed to increased global trade tensions and growing economic uncertainty.
The same report notes that India, benefiting from favourable demographics, will face a smaller decline in growth between 2025 and 2050 (about 0.7 percentage point), compared to China’s projected 2.7-point drop over the same period.
However, India too will face sharper slowdowns between 2050 and 2100 as demographic advantages fade.
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