India To Become 4th Largest Economy in 2025

India is set to become the world’s fourth-largest economy in 2025, overtaking Japan, according to the International Monetary Fund's World Economic Outlook April 2025 report.

This milestone comes as India's nominal GDP is projected at $4.19 trillion, marginally higher than Japan's estimated $4.18 trillion.

Until 2024, India held the position of the 5th largest global economy, but strong economic fundamentals, a surge in private consumption, and robust rural demand is said to have driven India into the top four. The report further states that India is on track to overtake Germany by 2028, becoming the 3rd largest economy globally, with a projected GDP of $5.58 trillion compared to Germany’s $5.25 trillion.

India is also expected to cross the $5 trillion mark by 2027, reinforcing its growth trajectory and global economic standing. The United States and China will continue to lead as the top two economies globally during this period.

However, the IMF has slightly lowered India’s GDP growth forecast for 2025 to 6.2%, down from 6.5% projected earlier, due to rising global trade tensions, largely triggered by tariff uncertainties and geopolitical shifts.

The IMF also observed that the global economic framework is undergoing a reset, ending decades of relative stability, which may impact emerging markets. Despite this, India’s outlook remains resilient, driven by consumption and investment momentum.

This development marks a defining moment in India’s economic ascent, showcasing its emergence as a major global economic force.