India Overtakes Japan to Become the World’s Fourth-Largest Economy

India has officially overtaken Japan to become the world’s fourth-largest economy, marking a significant milestone in the country’s economic journey. The development reflects India’s strong growth momentum at a time when several major economies are facing slower expansion and higher inflation pressures.

Recent global economic assessments and official statements confirm that India’s nominal GDP has moved ahead of Japan’s, placing the country behind only the United States, China and Germany. This shift highlights India’s rising role in the global economic order and signals growing confidence in its long-term prospects.

A Defining Moment for India’s Economy

India’s climb to the fourth position comes after years of steady expansion driven by domestic consumption, infrastructure spending and policy reforms. Economists describe the current phase as a “Goldilocks period”, where growth remains high while inflation stays relatively under control.

Over the past few years, India has consistently been one of the fastest-growing major economies. Strong performance in sectors such as services, manufacturing, technology and digital payments has helped support this rise. Government-led infrastructure projects, higher capital expenditure and improved tax collections have also played a key role.

Japan, on the other hand, has been dealing with slower growth, an ageing population and currency-related challenges, which have affected its nominal GDP ranking.

What Is Fueling India’s Strong Growth

Several factors are working in India’s favour. Domestic demand continues to remain resilient, supported by a large and young population. Urban consumption has stayed strong, while rural demand is gradually improving.

India’s services sector, especially IT, financial services and business process outsourcing, continues to be a major growth engine. At the same time, manufacturing is getting a boost from initiatives aimed at increasing local production and attracting global supply chains.

Inflation, while still monitored closely, has remained within a manageable range compared to many other economies. This has given policymakers room to balance growth with stability.

Eyes Set on the Third Spot by 2030

With India now in fourth place, attention has shifted to what lies ahead. Several global and domestic reports suggest that India could aim for the third-largest economy position by the end of this decade if current trends continue.

Sustained reforms, higher productivity, skill development and continued investment in infrastructure will be critical to maintaining this momentum. Experts also stress the importance of job creation, export growth and support for small businesses to ensure that economic growth remains inclusive.

While challenges such as global uncertainty, climate risks and income inequality remain, India’s recent economic performance has strengthened its position on the world stage.

India overtaking Japan is more than just a change in rankings. It reflects a broader shift in global economic dynamics and underlines India’s growing influence in shaping the future of the world economy.