Latest news today in India, India Surpasses Japan to Become World's Fourth-Largest Economy in 2025
India has officially surpassed Japan to become the world's fourth-largest economy in 2025, new world economic statistics reveal. With a nominal GDP of \\$4.19 trillion, India now stands third behind only the United States, China, and Germany in the world—another milestone in India's economic rise.
Times of India: India becomes 4th biggest economy
Key Drivers Behind India's Economic Ascent
1. Robust Private Consumption
India's growing middle class and rural economic support schemes have fueled growth in private consumption. Schemes like the Pradhan Mantri Kisan Samman Nidhi have increased disposable incomes among rural households, once again spurring domestic markets.
Government of India - PM Kisan Scheme
2. Structural and Tax Reforms
Successful implementation of the Goods and Services Tax (GST) raised tax compliance levels and eased logjams in logistics. GST collections in April 2025 alone recorded a record ₹1.87 lakh crore.
Economic Times: GST collections hit all-time high
3. Booming Service Sector
India's IT and software services industry remains a global leader, with top players like TCS, Infosys, and Wipro leading exports. The sector contributed more than \\$200 billion of 2025 exports.
4. Conducive Demographics
With a population of more than 1.45 billion and a median age of just 28.4 years, India possesses a demographic dividend that is conducive to labor-intensive growth and innovation.
World Bank - India Population Data
Economic Prospects and International Acclaim
According to the International Monetary Fund (IMF), India will overtake Germany to be the world's third-largest economy by 2028, with projected GDP of \\$5.58 trillion.
IMF World Economic Outlook – India Forecast
The feat was greeted by Commerce and Industry Minister Piyush Goyal, who further stated that India has beaten G7, G20, and BRICS nations in GDP growth over the last decade.
NDTV: India's GDP doubles in 10 years
Challenges Ahead
Despite these successes, India also faces numerous challenges:
- Graduate unemployment, and among young, skilled workers
- Declining middle-class income growth among middle-class families
- A declining fertility rate, which may strain long-term labor supply
- The Times UK: India's Long-Term Economic Risks
Economists advise India to maintain an 8%+ growth rate annually to fulfill its vision of being a developed nation by 2047, as envisioned by Prime Minister Narendra Modi.
Conclusion
India's ascension to the fourth-largest economy in the world is the product of four decades of policy reforms, digital innovation, and entrepreneurial spirit. It is a reason to celebrate, yet it also highlights the need for inclusive growth, strategic infrastructure investment, and social sector development.
As the country gets ready to mark its centenary year of independence in 2047, eyes will be on sustaining momentum and ensuring that economic success is translated into prosperity for all.
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