In a historic reshuffle of the global economic order, India has officially overtaken Japan to become the world’s fourth-largest economy as of late 2025. This milestone was spotlighted recently during the YEF Bharat Summit on December 20, 2024, where Union Minister Jyotiraditya Scindia confirmed India’s ascent from the 10th position just over a decade ago.
The Numbers: India vs. The World
As of December 2025, India’s nominal GDP has crossed the $4.19 trillion mark, narrowly edgeing out Japan. This transition is driven by a consistent growth rate of 6.2% to 6.8%, making India the fastest-growing major economy globally.| Rank | Country | GDP (Nominal) |
Status
1 | United States | $30.50 Trillion | Steady Growth ||
2 | China | $19.23 Trillion | Slowing Momentum ||
3 | Germany | $4.74 Trillion | Stagnant Growth ||
4 | India | $4.19 Trillion | Rising Star ||
5 | Japan | $4.18 Trillion | Muted Growth |
Key Drivers of the Rise
The leap to the fourth spot is attributed to several structural and strategic factors:
* Infrastructure Explosion: The government’s focus on “Gati Shakti” and massive capex spending has modernized logistics and transport.
* Digital Transformation: India’s digital public infrastructure (UPI, ONDC) has formalized a large portion of the informal economy.
* Startup Ecosystem: India is now the world’s third-largest startup ecosystem, with over 200,000 startups and 122 unicorns as of late 2025.
* Manufacturing Shift: Initiatives like the PLI (Production Linked Incentive) scheme have successfully positioned India as a viable alternative to China for global manufacturing.
The Road to $5 Trillion and Beyond
While the $4 trillion mark is a cause for celebration, the “5 Trillion Dollar Dream” has seen a slight shift in timeline. Due to global trade tensions and currency fluctuations, the IMF now projects India will hit the $5 trillion milestone by 2028-29.
More importantly, the focus is now shifting toward third place. Current projections suggest that India is on track to surpass Germany by 2027 to become the world’s third-largest economy.
“Over the past 12 years, India rose from 10th to 4th… by 2027, the nation will be the third-largest economy.” — Union Minister Jyotiraditya Scindia
The Per Capita Challenge
Despite the massive total GDP, India faces a significant “per capita” gap. With the world’s largest population, India’s per capita GDP stands at approximately $2,880. While this is a nearly 100% increase since 2014, it remains far below Japan’s $33,955, highlighting the need for continued inclusive growth to raise the standard of living for the masses.
India to become 4th largest economy by end of 2025
This video provides a detailed breakdown of the NITI Aayog’s projections and the IMF data that confirmed India’s rise past Japan in the global rankings.