India to become 4th largest economy in 2025 overtaking Japan

India is on track to emerge as the world’s fourth-largest economy by 2025, overtaking Japan in terms of nominal Gross Domestic Product (GDP), according to the latest World Economic Outlook report released by the International Monetary Fund (IMF). The report projects India’s nominal GDP to rise to $4.187 trillion next year, narrowly surpassing Japan’s estimated GDP of $4.186 trillion.

This milestone reinforces India’s position as the fastest-growing major economy in the world. The IMF forecasts India’s economic growth to remain robust over the next two years, with the country expected to be the only major economy to maintain a growth rate exceeding 6 per cent through 2025 and 2026.

In contrast, Japan's economic expansion is projected to slow significantly. The IMF estimates a meager growth rate of 0.6 per cent for both 2025 and 2026, as the country faces headwinds from a global trade slowdown. This stagnation, coupled with India’s accelerating economic momentum, is expected to cause a shift in global economic rankings.