Why India is the sixth largest economy in the world
The size of the economy has grown over the years; fundamentals remain robust
- Aug 12, 2026,
- Updated Aug 12, 2026 2:08 PM IST
A combination of factors, including the nominal GDP growth rate and the currency exchange rate are responsible for the size of any economy in US dollar terms. With the rupee under pressure over the last year and a change in the nominal GDP growth rate, the Indian economy has slipped to the sixth-largest position in the global economic hierarchy in 2025 and 2026, as indicated by the World Economic Outlook 2026 of the International Monetary Fund (IMF) in April this year.
Don't Miss: Ahead of Tata Sons AGM, N Chandrasekaran resigns as chairman, to complete his term Minister of State for Finance Pankaj Chaudhary also informed the Rajya Sabha of the same on August 11. “The International Monetary Fund in its World Economic Outlook for April 2026 noted India’s nominal GDP to be $ 3.92 trillion for 2025-26, which makes India the sixth-largest economy in the world,” he said in response to a question on India lagging among major global economies. He, however, noted that the IMF’s rankings are based on nominal GDP measured at prevailing US Dollar exchange rates. “Consequently, the relative ranking of economies can change due to a combination of factors, including economic growth, movements in exchange rates and prices, revisions to national accounts and changes in the size and growth of other major economies,” the minister said.
In Case You Missed IT: With the equalisation levy gone, how taxing digital profits has become complicated While India became the fifth-largest economy in the world sometime in 2019 with a size of $2.94 trillion, the size of the economy has grown despite a slip in the rankings. One of the key factors is the new series GDP with a base year of 2022-23, which pegged nominal GDP, or GDP at current prices, at Rs 345.47 trillion in FY26 from Rs 318.07 trillion in FY27. Compared to the old series, the economy's nominal size in the new series has reduced. Meanwhile, the Indian rupee has depreciated significantly in recent years, from an annual average exchange rate of 74.23 in FY22 against the US dollar to 88.31 in FY26. Since then, the rupee has fallen further and is trading at levels of 95.4 against the US dollar.
Must Read: SBI Research sees Q1 FY27 GDP growth at 8%, beats RBI’s 7% forecast; 86% indicators accelerate
The economy also remains robust and is the fastest-growing major economy in the world. A recent report by Fitch Ratings, affirming India’s sovereign rating at BBB- with a stable outlook, also highlighted that the rating reflects its robust growth outlook and solid external finance fundamentals.
A combination of factors, including the nominal GDP growth rate and the currency exchange rate are responsible for the size of any economy in US dollar terms. With the rupee under pressure over the last year and a change in the nominal GDP growth rate, the Indian economy has slipped to the sixth-largest position in the global economic hierarchy in 2025 and 2026, as indicated by the World Economic Outlook 2026 of the International Monetary Fund (IMF) in April this year.
Don't Miss: Ahead of Tata Sons AGM, N Chandrasekaran resigns as chairman, to complete his term Minister of State for Finance Pankaj Chaudhary also informed the Rajya Sabha of the same on August 11. “The International Monetary Fund in its World Economic Outlook for April 2026 noted India’s nominal GDP to be $ 3.92 trillion for 2025-26, which makes India the sixth-largest economy in the world,” he said in response to a question on India lagging among major global economies. He, however, noted that the IMF’s rankings are based on nominal GDP measured at prevailing US Dollar exchange rates. “Consequently, the relative ranking of economies can change due to a combination of factors, including economic growth, movements in exchange rates and prices, revisions to national accounts and changes in the size and growth of other major economies,” the minister said.
In Case You Missed IT: With the equalisation levy gone, how taxing digital profits has become complicated While India became the fifth-largest economy in the world sometime in 2019 with a size of $2.94 trillion, the size of the economy has grown despite a slip in the rankings. One of the key factors is the new series GDP with a base year of 2022-23, which pegged nominal GDP, or GDP at current prices, at Rs 345.47 trillion in FY26 from Rs 318.07 trillion in FY27. Compared to the old series, the economy's nominal size in the new series has reduced. Meanwhile, the Indian rupee has depreciated significantly in recent years, from an annual average exchange rate of 74.23 in FY22 against the US dollar to 88.31 in FY26. Since then, the rupee has fallen further and is trading at levels of 95.4 against the US dollar.
Must Read: SBI Research sees Q1 FY27 GDP growth at 8%, beats RBI’s 7% forecast; 86% indicators accelerate
The economy also remains robust and is the fastest-growing major economy in the world. A recent report by Fitch Ratings, affirming India’s sovereign rating at BBB- with a stable outlook, also highlighted that the rating reflects its robust growth outlook and solid external finance fundamentals.