Govt claims India ahead of Japan in GDP race, to surpass Germany in 2.5 to 3 years

India expects to surpass Germany to become the world’s third-largest economy within the next 2.5 to 3 years, with its GDP projected to rise to about $7.3 trillion by 2030, the government said today.

In a year end review of the state of the Indian economy, the Centre said that with a current GDP of $4.18 trillion, India has already overtaken Japan to rank as the world’s fourth-largest economy.

However, an official confirmation of India becoming the fourth largest economy would depend on data due in 2026 when final annual gross domestic product figures for fiscal 2025-26 are released, with the International Monetary Fund (IMF) suggesting India will cross over Japan next year.

The government has highlighted that India is the fastest-growing major economy globally, driven by strong domestic demand and ongoing reforms.

India's real GDP grew 8.2 per cent in the second quarter of 2025-26, up from 7.8 per cent in the first quarter and 7.4 per cent in the last quarter of the previous fiscal year.

“With GDP valued at USD 4.18 trillion, India has surpassed Japan to become the world's fourth-largest economy, and is poised to displace Germany from the third rank in the next 2.5 to 3 years with a projected GDP of USD 7.3 trillion by 2030,” the government said in a release summarising key reforms in 2025.

The United States remains the largest economy, with China in second place.

India's growth in 2025-26

The government stated that India’s growth exceeded expectations, reaching a six-quarter high in Q2 of 2025-26, demonstrating the country’s resilience amid global trade uncertainties. Domestic factors, especially strong private consumption, played a central role in this growth.

International agencies have also shared positive projections. The World Bank expects India’s growth at 6.5 per cent in 2026, while Moody’s predicts India will remain the fastest-growing G20 economy with 6.4 per cent growth in 2026 and 6.5 per cent in 2027.

The IMF has raised its projections to 6.6 per cent for 2025 and 6.2 per cent for 2026. The OECD forecasts 6.7 per cent growth in 2025 and 6.2 per cent in 2026. S&P expects 6.5 per cent growth this year and 6.7 per cent next year. The Asian Development Bank has lifted its 2025 forecast to 7.2 per cent, and Fitch has increased its FY26 projection to 7.4 per cent, citing strong consumer demand.

“India is among the world's fastest-growing major economies and is well-positioned to sustain this momentum. With the ambition of attaining high middle-income status by 2047 - the centenary year of its independence, the country is building on strong foundations of economic growth, structural reforms, and social progress,” the government said.

The release added that inflation remains under control, unemployment is falling, and exports are improving. Financial conditions are stable, with strong credit flows to businesses and continued strength in urban consumption.

(With inputs from PTI)