India on Track to Be World's 4th Largest Economy, Rubix Report

India is expected to become the fourth-largest economy in the world by 2025, overtaking Japan, and it would be a massive change in Asia's economic scenario, says the latest Rubix Country Insights Report: Japan by Rubix Data Sciences.

The research notes that India's GDP growth will be USD 4,187 billion, surpassing Japan's in the presence of external and internal economic challenges confronting the latter. The economy of Japan increased only 0.1% in 2024, undermined by slack household consumption, expensive imports, and continuous inflation at 3.7%.

Adding to the woes of Japan, the United States too is set to charge 25% tariffs on imports from Japan from August 1, a move that is likely to restrain Japan's GDP growth by 0.26 percentage points and reduce margins for exporters by as much as 25%, disproportionately affecting the automotive industry.

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Swamping the pressure, however, has been the resilience displayed by Japan's corporate sector. M&A action reported a 40-year high of more than USD 230 billion in 2024, spearheaded by such blockbusters as Nippon Steel's acquisition of U.S. Steel.

On the other hand, Indian exports to Japan, especially auto, have risen from 1% to 13% of total exports in four years. Two-way trade has reached over USD 25 billion in FY2025 at a 13% CAGR, although India's trade deficit with Japan has widened.

"India and Japan, the world's 4th and 5th largest economies, are further deepening strategic partnerships in trade, manufacturing, and digital," said Mohan Ramaswamy, CEO at Rubix Data Sciences.