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India Set to Overtake Japan as Fourth-Largest Economy by End of 2025

Projected GDP of $4.187 trillion edges out Japan’s $4.186 trillion estimate, driven by strong private consumption.

Overview

  • The IMF’s April 2025 World Economic Outlook forecasts India’s nominal GDP at $4.187 trillion in 2025-26, narrowly surpassing Japan to claim fourth place.
  • Private consumption—particularly in rural areas—is expected to sustain a 6.2% GDP growth rate in 2025-26, keeping India the fastest-growing major economy.
  • Per capita income remains low at $2,880, ranking 141st globally, while the top 1% of households now hold over 40% of national wealth.
  • NITI Aayog officials project India will overtake Germany by 2027-28 to become the world’s third-largest economy if current policies continue.
  • Economists warn that deeper reforms in labour markets, education, agriculture and infrastructure are crucial to spread the benefits of GDP growth more evenly.