In a landmark achievement for the nation, India has officially overtaken Japan to become the world's fourth-largest economy. The Central government announced this significant milestone on Tuesday, December 30, revealing that India's economy now stands at a formidable USD 4.18 trillion in size.
China Applauds India's Economic Milestone
The development has drawn positive acknowledgment from a key global neighbour. The spokesperson for the Chinese Embassy in India, Yu Jing, expressed delight at India's achievement. In a notable statement, Jing remarked that "India's rise shows that true strength comes from facing history honestly, learning from it, and taking responsibility for the future." This diplomatic recognition underscores the growing significance of India's economic trajectory on the world stage.
The Road to the Top Three: Targets and Projections
The government's announcement was not just about the present achievement but also laid out an ambitious roadmap for the future. According to the official press release, India is now poised to displace Germany and become the world's third-largest economy within the next 2.5 to 3 years. The projection is for India's GDP to reach an impressive USD 7.3 trillion by the year 2030.
This confidence is backed by robust and accelerating growth numbers. India's real GDP growth climbed to a six-quarter high of 8.2 per cent in the second quarter of the 2025-26 fiscal year. This marks an increase from 7.8 per cent in Q1 and 7.4 per cent in the final quarter of the previous fiscal year. The government highlighted that domestic drivers, especially strong private consumption, were central to this expansion, even amidst persistent global trade uncertainties.
Global Agencies Echo Optimism for Sustained Growth
The optimism surrounding India's economy is widely shared by major international financial institutions and rating agencies. Their revised projections paint a consistently bright picture:
- World Bank: Projects 6.5% growth in 2026.
- Moody's: Expects India to remain the fastest-growing G20 economy, predicting 6.4% growth in 2026 and 6.5% in 2027.
- International Monetary Fund (IMF): Raised its forecast to 6.6% for 2025 and 6.2% for 2026.
- Organisation for Economic Co-operation and Development (OECD): Forecasts 6.7% growth in 2025 and 6.2% in 2026.
- S&P Global: Anticipates 6.5% growth in the current fiscal year and 6.7% in the next.
- Asian Development Bank (ADB): Lifted its 2025 forecast to 7.2%.
- Fitch Ratings: Raised its FY26 projection to 7.4%, citing stronger consumer demand.
The government statement affirmed that India is among the world's fastest-growing major economies and is well-positioned to sustain this momentum. It reiterated the nation's long-term ambition of attaining high middle-income status by 2047, the centenary year of its independence, building on strong foundations of economic growth, structural reforms, and social progress.
With the United States and China holding the top two positions, and Germany currently in third, India's ascension reshapes the global economic order. The country's journey from the fifth to the fourth position, and its clear sight on the third, marks a new chapter in its economic story.
