India replaces Japan as world’s 4th largest economy, poised to overtake Germany for 3rd rank

India has surpassed Japan to become the world’s fourth-largest economy and is now poised to displace Germany from the third rank in the next 2.5 to 3 years, said NITI Aayog Chief Executive Officer (CEO) B.V.R. Subrahmanyam.

“We are the fourth largest economy as I speak. We are a USD 4 trillion economy as I speak, and this is not my data. This is IMF data. India today is larger than Japan,” said Subrahmanyam at a press conference of the 10th NITI Aayog Governing Council Meeting.

“It’s only the United States, China, and Germany which are larger, and if we stick to, you know, what is being planned, what is being thought through, it’s a matter of another 2, 2.5 to 3 years; we would become the third largest economy,” Subrahmanyam pointed out.

The IMF had stated earlier this month in the World Economic Outlook report that India is poised to become the world’s fourth-largest economy in 2025, with the country’s nominal GDP rising to $4,187.017 billion to surpass Japan’s GDP pegged at $4,186.431 billion.

According to the report, India continues to remain the world’s fastest-growing major economy and the only country expected to clock over 6 per cent growth in the next two years.

The high rate of growth will see India’s GDP increasing to $5,584.476 billion in 2028 as it overtakes Germany to become the third-largest economy.

The IMF has projected a zero growth rate for Germany in 2025, followed by 0.9 per cent in 2026 as it is expected to be hit the hardest among the European countries due to the ongoing global trade war. Germany’s GDP is projected at $5,251.928 billion in 2028.

Japan, on the other hand, is expected to be hard hit by the global trade war, with its growth stagnating at 0.6 per cent for 2025 and 2026.

The GDP of the US, the world’s largest economy, has been pegged at $30,507.217 billion for 2025, while that of China, the second biggest, is $19,231.705 billion.

The US, which has triggered the tariff turmoil across the globe, is expected to see its GDP growth slowing to 1.8 per cent this year, which is expected to decline further to 1.7 per cent in 2026, according to the IMF report.

Similarly, the Euro Area is forecast to slow to a mere 0.8 per cent growth rate in 2025 before it makes a mild recovery at 1.2 per cent in 2026. France is predicted to post a 0.6 per cent and 1 per cent growth for the two years, respectively.

Spain is expected to do better than the other in 2025 as the only European country to clock a 2.5 per cent growth rate. However, it is expected to slow down to 1.8 per cent in 2026. The UK is expected to post a 1.1 and 1.4 per cent growth respectively for the two years.

(With inputs from IANS)