In a landmark achievement for India’s economic journey, the country has officially overtaken Japan to become the world’s fourth-largest economy, according to the latest data from the International Monetary Fund (IMF). The announcement was confirmed by NITI Aayog CEO B V R Subrahmanyam, who shared the development during a recent public interaction, highlighting India’s ongoing rise in global economic rankings.
As per IMF estimates, India’s nominal GDP has now touched $4 trillion, moving it ahead of Japan, whose economy has been facing challenges like deflation, declining working-age population, and subdued consumption. This significant leap underscores India’s resilient post-pandemic recovery, robust domestic demand, and booming service and manufacturing sectors.
This milestone marks a continuation of India’s long-term trajectory toward becoming a global economic powerhouse. With a population of over 1.4 billion, favorable demographics, and an expanding middle class, India’s economy has shown remarkable agility in adapting to global shocks while accelerating structural reforms. Key sectors such as IT services, digital payments, pharmaceuticals, and renewable energy have played pivotal roles in propelling GDP growth.
The Indian economy was ranked fifth globally just a year ago, behind the United States, China, Japan, and Germany. With this latest development, the updated rankings now place India in fourth place, trailing behind only the U.S., China, and Germany.
According to B V R Subrahmanyam, this is only the beginning. He emphasized that India is well on track to reach the $5 trillion GDP mark within the next two years, driven by increasing private investments, infrastructure expansion, and global interest in India as a reliable supply chain alternative. The government’s emphasis on “Make in India,” Digital India, and startup ecosystems has created a fertile ground for innovation and entrepreneurship, further fueling growth.
In contrast, Japan’s economy has been grappling with stagnation, a shrinking labor force, and lower-than-expected export recovery. The depreciation of the yen and rising import costs have added to its economic woes, making room for India’s ascent in global rankings.
The news comes at a time when India is also asserting its voice more confidently on the global geopolitical stage. With its growing economic clout, India is expected to play a more active role in international policymaking, trade negotiations, and climate commitments.
From an investor and policy standpoint, this achievement will likely boost confidence in India’s macroeconomic stability and long-term growth prospects. It also places greater responsibility on policy frameworks to maintain fiscal discipline, enhance ease of doing business, and ensure inclusive growth.
This economic milestone not only reflects India’s progress but also serves as a symbol of its aspirations to become a developed nation within the next two decades.
Written by Indira Securities SEBI Registered with 30 plus years of experience in Stock Market!!!