India Surpasses Japan to Claim Spot as World’s 4th Largest Economy

India has overtaken Japan as the fourth-largest economy in the world, and this has been a significant milestone in the economic journey of India.

With the government's end-of-year review of the economy, India has been ranked as the only country after the United States, China and Germany with a nominal GDP of $4.18 trillion. Although this will be officially confirmed only after the release of the final annual GDP data in 2026, the International Monetary Fund (IMF) projections have already revealed that India is already ahead of Japan.

The change is indicative of the long-term effects of reforms in the economy, robust domestic demand and increased industrial and services production. During the last ten years, India has made efforts to enhance its manufacturing sector, increase investment in infrastructure and facilitation doing business. Programs like Make in India, Production Linked Incentive (PLI) plans, and investment in massive infrastructural projects have been of paramount importance in boosting growth.

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The services sector remains a significant contributor with the aid of technology, financial services and global capability centres and manufacturing and exports have been performing steadily. The increasing foreign direct investment, an expanding consumer market, and digital transformation in the various sectors have further strengthened the economic momentum of India.

The status of the fourth-largest economy in the world is also geopolitically and strategically important to India. It enhances the presence of the country in the international trade, the chain of supply, and multilateral conferences and it raises the level of investor confidence in the long-term growth prospects.

Having a young population and a growing industrial potential, the Indian growth trait is increasingly being observed as one whose growing influence in the world economy by the decade's end.