Leaving Japan behind, India becomes the world’s fourth largest economy, will overtake Germany by 2030

New Delhi30 December. India is set to overtake Japan to become the world’s fourth largest economy with a gross domestic product (GDP) of US$4.18 trillion by 2025, according to a government update on the country’s economic reforms. The report also said that as the economy strengthens further, India is on track to overtake Germany to reach the third position by 2030.

India continues to maintain its position as the fastest growing major economy. Real GDP has increased by 8.2 percent in the second quarter of 2025-26. This is better than 7.8 percent in the first quarter and 7.4 percent recorded in the fourth quarter of the last financial year.

Boosted by strong domestic growth

“With a GDP of US$4.18 trillion, India has overtaken Japan to become the world’s fourth largest economy and is set to displace Germany from the third position in the next 2.5 to three years,” a government statement said. The estimated GDP by 2030 will be US$ 7.3 trillion.

It is noteworthy that the United States remains the world’s largest economy and China is in second place. India’s fast-growing economy reflects its strength amid current global trade uncertainties. Domestic demand, particularly strong private consumption, has played a key role in maintaining this momentum, the press release said.

Global agencies continue to express confidence in India’s development path International financial institutions have supported India’s strong economic outlook. The World Bank expects 6.5 percent growth in 2026 while Moody’s estimates India to remain the fastest growing G20 economy with 6.4 percent growth in 2026 and 6.5 percent in 2027. The IMF has revised its projections to 6.6 percent in 2025 and 6.2 percent in 2026. The OECD projects growth of 6.7 percent for 2025 and 6.2 percent for 2026.

S&P expects growth of 6.5 percent for the current fiscal year and 6.7 percent for the next year. The Asian Development Bank has raised its forecast for 2025 to 7.2 percent while Fitch now expects 7.4 percent growth in FY26, led by strong consumer spending.

The statement said, ‘India is one of the fastest growing major economies in the world and is well positioned to maintain this momentum. With the ambition to become an upper middle-income country by 2047, the country is moving forward on a strong foundation of economic growth, structural reforms and social progress.’

Macroeconomic indicators strengthened further

The release said inflation remains below the lower tolerance limit, unemployment is steadily declining and exports are gradually improving. Financial conditions remain favorable with healthy credit flows to the commercial sector. Urban consumption has strengthened, further supporting demand conditions.