Rapid Fire
India as the World’s Fourth Largest Economy
- 01 Jan 2026
- 2 min read
The Government announced that India has surpassed Japan to become the world's fourth-largest economy with a GDP of USD 4.18 trillion and is the fastest-growing major economy. Currently, India is behind the United States (USD 30.6 trillion), China (USD 19.4 trillion), and Germany (USD 5 trillion).
- Immediate Expectations: India is poised to displace Germany from the third rank in the next 2.5 to 3 years with a projected GDP of USD 7.3 trillion by 2030.
- GDP in PPP Terms: India's economy ranks 3rd globally in Purchasing Power Parity (PPP) terms at USD 14 trillion, behind China (USD 33 trillion) and the United States (USD 25 trillion).
- The IMF projects India’s GDP (PPP) could reach USD 20.7 trillion by 2030 and potentially become the world's second-largest PPP economy by 2038 with a GDP of USD 34.2 trillion.
- Robust Growth Momentum: India’s real GDP grew by 8.2% in Q2 (July, August, and September) of 2025-26, marking a six-quarter high, reflecting the economy's resilience against global trade uncertainties.
- International Projections: The World Bank projects a 6.5% growth rate for India in 2026, while the IMF raised its forecast to 6.6% for 2025.
- The Asian Development Bank lifted its 2025 forecast to 7.2%, and Moody's expects India to remain the fastest-growing G20 economy.
- Supportive Macroeconomic Indicators: Inflation is low, unemployment is declining, and strong credit flow and urban demand support sustained growth.
- Vision 2047: India’s long-term vision targets high middle-income status by 2047, anchored in structural reforms, economic resilience, and social progress.
| Read More: Targeting Higher Growth Rate for India |
