India says its economy has overtaken Japan

NEW DELHI: India says overtaken Japan as the world’s fourth-biggest economy — and officials hope to pass Germany within three years, the government’s end-of-year economic review calculates.

Official confirmation however depends on data due in 2026 when final annual gross domestic product figures are released, with the International Monetary Fund suggesting India will cross over Japan next year.

“India is among the world’s fastest-growing major economies and is well-positioned to sustain this momentum,” read the government economic briefing note, which was released late Monday.

“With GDP valued at $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 two-and-a-half to three years, with projected GDP of $7.3 trillion by 2030.”

IMF projections for 2026 put India’s economy at $4.51 trillion, compared with Japan’s $4.46 trillion.

New Delhi’s upbeat assessment comes despite economic worries after Washington in August hit New Delhi with huge tariffs over its purchases of Russian oil.

But other measurements offer a less rosy outlook.

In terms of population, India overtook neighbouring China as the most populous nation in 2023.

India’s GDP per capita was $2,694 in 2024, according to the latest World Bank figures, 12 times smaller than Japan’s $32,487, and 20 times smaller than Germany’s $56,103.

More than a quarter of India’s 1.4 billion people are aged between 10 and 26, according to government figures, and the country is already struggling to generate well-paid jobs for millions of young graduates.

“As one of the world’s youngest nations, India’s growth story is being shaped by its ability to generate quality employment that productively absorbs its expanding workforce and delivers inclusive, sustainable growth,” the note added.

Prime Minister Narendra Modi this year unveiled sweeping consumption tax cuts and pushed through labour law reforms after economic growth hit a four-year-low, in the 12 months ended March 31.

India’s rupee hit a record low against the dollar in early December — having dropped around five percent in 2025 — owing to ongoing worries about the lack of a trade deal with Washington and the impact of the levies on the country’s goods.

India became the world’s fifth-largest economy in 2022, when its GDP overtook that of former colonial ruler Britain, according to IMF figures.