India has reached a historic economic landmark, overtaking Japan to become the world’s fourth-largest economy, with a gross domestic product (GDP) crossing the $4 trillion mark. This development was confirmed by NITI Aayog CEO BVR Subrahmanyam during the 10th Governing Council meeting, citing the most recent data from the International Monetary Fund (IMF).
According to the IMF’s World Economic Outlook, India’s nominal GDP for FY 2025–26 is projected at $4.187 trillion, marginally surpassing Japan’s $4.186 trillion. This shift signals not just a change in ranking but also reflects India’s sustained economic momentum, propelled by strategic reforms, robust domestic demand, and increasing global confidence in the country as a manufacturing and investment hub.
Subrahmanyam attributed the achievement to a combination of policy consistency, economic liberalisation, and efforts to position India as a key player in global value chains. He emphasised that India’s economic fundamentals remain strong, projecting continued high growth rates, with the nation expected to maintain its status as the fastest-growing major economy globally.
India’s GDP has more than doubled from $2.1 trillion in 2015, highlighting a decade of transformative economic expansion. Furthermore, per capita income has nearly doubled from $1,438 in 2013–14 to approximately $2,880 in 2025, reflecting improved living standards and broader economic inclusion. However, India still faces a wide gap in per capita GDP compared to developed economies like Japan, where it stands at $33,960.
Looking ahead, Subrahmanyam expressed confidence that India could surpass Germany within the next two and a half to three years, ascending to the position of the world’s third-largest economy. He pointed to ongoing reforms, including the upcoming round of asset monetisation initiatives expected in August, which aim to enhance infrastructure and capital formation.
Prime Minister Narendra Modi, addressing the NITI Aayog council, reiterated his vision of transforming India into a developed nation by 2047. He called upon states and union territories to work in tandem, transcending political differences to fulfil the aspirations of 1.4 billion citizens.
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This economic milestone underscores India’s growing influence in global affairs and marks a critical step toward its emergence as a dominant economic power in the 21st century.