India says its economy has overtaken Japan, Germany eyes

• Revise GDP to $4.18 trillion.
• Final confirmation awaits annual GDP figures for 2026.
• The IMF predicts that India will overtake Japan in 2026.

NEW DELHI: India has overtaken Japan as the world’s fourth-largest economy – and officials hope to overtake Germany within three years, the government’s year-end economic review estimates.

Official confirmation, however, depends on figures due in 2026, when final figures for annual gross domestic product are released, with the International Monetary Fund (IMF) tipping India to overtake Japan next year.

“India is among the fastest growing major economies in the world and is well positioned to maintain this momentum,” said the government’s economic briefing note released late Monday.

“With a GDP worth $4.18 trillion, India has overtaken Japan to become the world’s fourth largest economy and is poised to dislodge Germany from third place in the next two and a half to three years, with a projected GDP of $7.3 trillion by 2030.”

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

New Delhi’s upbeat assessment comes despite economic concerns after Washington in August hit New Delhi with massive tariffs on its purchases of Russian oil.

India said the continued growth reflected its “resilience amid persistent global trade uncertainties”.

But other metrics offer a less rosy outlook.

In terms of population, India surpassed neighboring China as the most populous nation in 2023.

India’s GDP per capita was $2,694 in 2024, according to the latest World Bank data, 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 between the ages of 10 and 26, according to government figures, and the country is already struggling to create well-paying jobs for millions of young graduates.

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

Prime Minister Narendra Modi this year unveiled sweeping consumption tax cuts and pushed through labor 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 fallen about 5% in 2025 – on ongoing concerns over the lack of a trade deal with Washington and the impact of tariffs on the country’s goods.

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