(Image source from: Canva.com)
India has overtaken Japan to become the fourth-largest economy in the world, now worth USD 4.18 trillion, and is expected to surpass Germany to take the third position by 2030, according to the government. As growth continues to perform well, India has also emerged as the fastest-growing major economy globally. In the second quarter of 2025-26, India's actual GDP increased by 8.2 percent, rising from 7.8 percent in the first quarter and 7.4 percent in the last quarter of the previous fiscal year. "With a GDP standing at USD 4.18 trillion, India has gone past Japan to take the fourth spot in the global economy, and it is on track to take Germany's place as the third largest in the next 2.5 to 3 years, with a forecasted GDP of USD 7.3 trillion by 2030," mentioned a government statement that summarized updates on reforms in 2025. The US remains the largest economy worldwide, followed by China in second place.
The growth rate surpassed expectations, with GDP reaching a six-quarter high in Q2 of 2025-26, showing India's strength despite ongoing global trade challenges, the report stated. The main factors supporting this rise were strong private consumption and domestic demand.
The report also indicated that international organizations share this optimistic view and have provided various forecasts. The World Bank expects a growth rate of 6.5 percent in 2026; Moody's predicts India will stay the fastest-growing economy in the G20, projecting growth rates of 6.4 percent in 2026 and 6.5 percent in 2027. The IMF has increased its growth predictions to 6.6 percent for 2025 and 6.2 percent for 2026, while the OECD anticipates 6.7 percent growth for 2025 and 6.2 percent for 2026. In addition, S&P forecasts a growth of 6.5 percent in the current fiscal year and 6.7 percent the following year; the Asian Development Bank has raised its 2025 projection to 7.2 percent, and Fitch has increased its FY26 estimate to 7.4 percent, citing stronger consumer demand.
"India ranks among the fastest-growing major economies globally and is in a good position to maintain this growth. Aiming to reach high middle-income status by 2047, the centenary of its independence, the country is building on a solid foundation of economic growth, structural reforms, and social advancements," said the government. The report also pointed out that inflation is low, below the minimum acceptable level, unemployment is decreasing, and export performance is getting better. Additionally, financial situations are favorable, with healthy credit flows to businesses, while the demand remains strong, boosted by increased urban consumption.
