India is on track to overtake Japan and become the world’s fourth-largest economy by 2025, based on the latest data from the International Monetary Fund (IMF) released in April.
The IMF estimates India’s nominal GDP will rise to $4.187 trillion, narrowly surpassing Japan’s $4.186 trillion.
This represents a notable jump from 2024, when India ranked fifth with a GDP of $3.9 trillion, still behind Japan’s $4.1 trillion. The shift highlights India's strong and sustained economic growth, which continues to outpace that of other major economies.
According to the IMF’s April 2025 World Economic Outlook, India’s economy is projected to grow by 6.3% in real terms in 2025, a slight downgrade from the earlier 6.5% forecast, Business Today reports.
Despite the revision, India remains the fastest-growing major economy, with further growth expected at 6.2% in 2025 and 6.3% in 2026.
In contrast, Japan’s economy is forecast to expand by only 0.6% in 2025, underscoring the widening gap in economic momentum between the two countries.
India’s rapid economic growth is reshaping the global economic landscape, giving it a significant edge over both regional and global peers. According to IMF data, this momentum is expected to persist, fuelled by strong domestic demand and favourable demographic trends.
India’s anticipated expansion stands out amid broader global uncertainties, such as trade tensions and shifting policy environments that have weighed heavily on many developed economies, including Japan.
Japan’s economic prospects have been dampened by external pressures, particularly ongoing trade disputes.
The IMF recently cut its 2025 growth forecast for Japan to 0.6%, down from 1.1% in its January outlook, citing the adverse effects of rising tariffs, especially those imposed by the United States.
These challenges are further intensified by Japan’s ageing population and declining workforce, structural issues that hinder long-term economic growth. In contrast, these constraints highlight Japan’s sluggish progress compared to India’s vibrant and fast-paced economic expansion.
India’s ascent to becoming the world’s fourth-largest economy marks a significant transformation in the global economic hierarchy. IMF projections indicate that by 2030, India’s economy will reach $6.8 trillion, making it 20% larger than Germany’s and over 33% bigger than Japan’s.
This shift follows India’s earlier milestone in 2020, when it surpassed the UK to claim the fifth spot. Over the next four years, the IMF expects India’s economy to grow by 10.1%, reinforcing its position as a dominant force in the global market.