New Delhi: India has overtaken Japan to become the world’s fourth-largest economy with a nominal GDP of USD 4.18 trillion and is on track to surpass Germany to claim the third position by 2030, according to the government’s year-end economic review.
The economic review mentioned that India could reach a GDP size of USD 7.3 trillion by 2030, displacing Germany from the third rank within the next 2.5 to 3 years. The United States remains the world’s largest economy, followed by China.
India continues to be world’s fastest-growing major economy
“With GDP valued at USD 4.18 trillion, India has surpassed Japan to become the world’s fourth-largest economy and is poised to displace Germany from the third rank,” the government said in the release. The final confirmation will depend on data to be released by the International Monetary Fund (IMF) in the first half of 2026.
India continues to be the world’s fastest-growing major economy, with real GDP expanding 8.2 per cent in the second quarter of FY 2025–26, a six-quarter high. Growth had stood at 7.8 per cent in the first quarter and 7.4 per cent in the final quarter of the last fiscal year.
The strong performance has been attributed to robust domestic demand, which helped the economy tide over global trade uncertainties.
International agencies echo optimistic outlook
The World Bank has projected 6.5 per cent growth for India in 2026, while Moody’s expects the country to remain the fastest-growing G20 economy with growth of 6.4 per cent in 2026 and 6.5 per cent in 2027.The IMF has raised its projections to 6.6 per cent for 2025 and 6.2 per cent for 2026, while the OECD forecasts growth of 6.7 per cent in 2025 and 6.2 per cent in 2026.
S&P Global expects India to grow 6.5 per cent in the current fiscal and 6.7 per cent in the next, while the Asian Development Bank has revised its 2025 forecast upward to 7.2 per cent. Fitch has raised its FY26 growth projection to 7.4 per cent.
The Reserve Bank of India has also revised its growth estimate for FY 2025–26 to 7.3 per cent from earlier 6.8 per cent, factoring in domestic demand, softer crude oil prices, early government capital spending and accommodative monetary conditions.
Current account deficit has also narrowed
India’s current account deficit has also narrowed to 1.3 per cent of GDP in the second quarter of FY 2025–26 from 2.2 per cent a year earlier. “India is among the world’s fastest-growing major economies and is well-positioned to sustain this momentum,” the government said, reiterating its goal of attaining high middle-income status by 2047.