India Becomes World’s Fourth-Largest Economy, Surpasses Japan: Report

India surpasses Japan, becomes world’s 4th-largest economy; GDP hits $4.18T, growth driven by consumption & exports. India’s growth has been largely driven by domestic demand.

Exports have strengthened, with merchandise shipments rising to $38.13 billion in November.

Source : abp live

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India has surpassed Japan to become the world’s fourth-largest economy, according to the Indian government’s end-of-year economic review. On current trends, India is expected to overtake Germany within the next three years to become the third-largest economy globally.

The review estimates India’s gross domestic product (GDP) at $4.18 trillion (€3.55 trillion) in 2025, projected to reach $7.3 trillion by 2030. Real GDP growth hit 8.2% in the second quarter of 2025–26, up from 7.8% in the previous quarter, marking a six-quarter high.

Exports Surge, Growth Forecast

Exports have also strengthened, with merchandise shipments rising to $38.13 billion in November from $36.43 billion in January, led by engineering goods, electronics, pharmaceuticals, and petroleum products.

Official confirmation will depend on final annual GDP data due in 2026. The International Monetary Fund has projected that India will surpass Japan next year. Meanwhile, the Reserve Bank of India has revised its growth forecast for the 2025–26 financial year upward to 7.3%.

Drivers of the Economic Boom

India’s growth has been largely driven by domestic demand, especially robust private consumption, despite global trade uncertainties. The government described the current period as a “Goldilocks” phase of high growth and low inflation, with strong corporate balance sheets, steady credit flows, and ongoing reforms providing a foundation for sustained expansion.

“India is among the world’s fastest-growing major economies and is well-positioned to sustain this momentum,” the report said. It added that India is building on strong economic and social foundations with the ambition of achieving high middle-income status by 2047, the centenary of independence.

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