‘We must stay...’: Anand Mahindra says next leap must be in per capita GDP as India beats Japan to 4th in GDP

When Anand Mahindra was in business school, the idea of India overtaking Japan economically seemed like a distant dream. Today, that dream is reality. India has officially surpassed Japan to become the world’s fourth-largest economy, clocking a nominal GDP of $4.19 trillion, according to the International Monetary Fund. The announcement was underscored by NITI Aayog CEO BVR Subrahmanyam during the 10th Governing Council meeting, where he hailed India’s economic ascent as a product of both favorable geopolitics and steady policy reforms.

For Mahindra, the moment is more than symbolic. “When I was in business school, the idea of India overtaking Japan in GDP felt like a distant, almost audacious dream,” he posted on X (formally Twitter). “Today, that milestone is no longer theoretical — we’ve become the world’s fourth largest economy.”

Mahindra emphasised the significance of outpacing a country with Japan’s economic legacy. “Japan has long been an economic colossus, with legendary productivity and resilience. That we’ve caught up is a testament to the ambition and ingenuity of millions of Indians — across sectors, generations, and geographies.”

But he was quick to pivot from celebration to challenge. “As we celebrate, we must stay dissatisfied. Because India’s next leap must be in per capita GDP, not just overtaking Germany… India needs sustained economic reforms — in governance, infrastructure, manufacturing, education, and capital access.”

India’s rise to the fourth spot is the result of a multi-decade economic overhaul. The transformation began in 1991, when a balance of payments crisis triggered a wave of liberalisation led by then-Finance Minister Manmohan Singh. The dismantling of the License Raj, easing of trade restrictions, and push for foreign investment steered India toward a market-driven economy.

Recent reforms have accelerated that momentum. The rollout of the Goods and Services Tax in 2017 unified the indirect tax regime, while campaigns like ‘Make in India’ and ‘Atmanirbhar Bharat’ have bolstered domestic industry and lured global investment.

Financial digitisation and the Insolvency and Bankruptcy Code have also made it easier to do business in India, boosting investor confidence and entrepreneurial activity.

Together, these reforms have not only expanded India’s economic base but also fortified its global standing. With structural reforms and sustained discipline, India is positioning itself not just to rise further — but to rise smarter.