India Overtakes Japan to Become World’s Fourth-Largest Economy

India has overtaken Japan to become the world’s fourth-largest economy, according to the government’s year-end economic review. While the official position will be confirmed after the release of annual GDP figures for 2026, projections by the International Monetary Fund (IMF) also indicate that India is set to remain ahead of Japan.

Government estimates place India’s gross domestic product at around $4.18 trillion, with the IMF projecting it to rise to about $4.51 trillion in 2026, slightly higher than Japan’s expected output. Officials believe that if current growth momentum continues, India could surpass Germany within the next two-and-a-half to three years, with GDP potentially reaching $7.3 trillion by 2030.

Despite strong growth and resilience in the face of global trade uncertainties, challenges remain. India’s per capita income is still relatively low, and the government faces the task of creating quality jobs for its young population, even as it pursues tax cuts and labour reforms to support sustained and inclusive economic growth.