India Set to Overtake Japan 2025 | world's largest economy

India is on track to mark a major economic milestone in 2025 by becoming the fourth-largest economy in the world, surpassing Japan, according to the latest International Monetary Fund (IMF) report. With sustained growth projected, India is expected to leap ahead of Germany by 2028 to secure the third spot, cementing its rise as a global economic powerhouse.

Quick Read:

India to surpass Japan in 2025 to become the world’s 4th largest economy.
Nominal GDP for India in 2025 estimated at $4.187 trillion, just ahead of Japan.
By 2027, India is expected to reach the $5 trillion economy milestone.
India to overtake Germany by 2028, becoming the 3rd largest economy globally.
IMF revised India’s 2025 GDP growth forecast from 6.5% to 6.2% due to rising global uncertainties.
Growth supported by strong domestic consumption, especially in rural areas.

India’s economic rise just got a powerful endorsement from the International Monetary Fund (IMF). In its latest World Economic Outlook report (April 2025), the IMF projects that India will surpass Japan in 2025 to become the world’s fourth-largest economy—a major leap in its journey toward global economic leadership.

The report pegs India’s nominal GDP for FY26 (calendar year 2025) at $4.187 trillion, slightly edging past Japan, which is estimated to reach $4.186 trillion. This subtle but symbolic overtaking is expected to happen this year, marking a significant transition in the global economic order.

Up until 2024, India held the fifth position in the global GDP rankings, trailing behind the United States, China, Japan, and Germany. But now, all signs point toward India steadily climbing the ranks. According to IMF forecasts, India will reach a $5 trillion GDP milestone by 2027, and by 2028, the country is expected to overtake Germany to become the third-largest economy, with a projected GDP of $5.58 trillion, outpacing Germany’s $5.25 trillion.

What’s Fueling India’s Economic Surge?

India’s rapid economic rise is being powered by strong private consumption, particularly from its vast rural population, which is contributing significantly to domestic demand. This internal consumption buffer has made India’s growth relatively resilient, even in the face of rising global trade tensions and economic uncertainties.

However, the journey isn’t without a few bumps. The IMF, in its April 2025 report, slightly downgraded India’s GDP growth forecast to 6.2% for the year—down from 6.5% in its January 2025 outlook. The dip, according to the IMF, is due to an uncertain global environment, heightened by geopolitical tensions and U.S. tariff decisions under President Donald Trump’s administration.

Despite these external pressures, the IMF noted that India’s overall outlook remains positive and more stable compared to other large economies, thanks largely to its robust domestic market and policy measures that have encouraged consumption-led growth.

Why This Matters

India’s steady rise up the global economic ladder isn’t just about numbers—it signals shifting power dynamics in the global economy. With its youthful population, tech-savvy workforce, and expanding industrial base, India is increasingly being seen as a major driver of global growth in the coming decades.

Economists also highlight that India’s growing economic footprint will likely translate into greater influence in global policy and trade negotiations, a stronger voice in international institutions, and a more prominent role in shaping the future of global development.

The Road Ahead

Reaching the $5 trillion mark by 2027 and climbing to the third-largest economy by 2028 won’t be without challenges. India will need to maintain economic stability, continue reforms to boost productivity, and manage external pressures like oil prices, currency volatility, and global trade dynamics. But with its current momentum, many believe India is well on course.

In a world where economic power is constantly shifting, India’s rise is a story of resilience, ambition, and the sheer potential of a billion-plus people shaping their future—and the world’s.