India has overtaken Japan to become the fourth-largest economy in the world, with its Gross Domestic Product (GDP) projected to reach 4.187 trillion dollars in the financial year 2025-26, according to the International Monetary Fund (IMF).
Industrialist Anand Mahindra reacted to the news, calling it a dream come true and urging the country not to become complacent.
“It is no small achievement,” Mahindra wrote on X.
When I was in business school, the idea of India overtaking Japan in GDP felt like a distant, almost audacious dream. Today, that milestone is no longer theoretical — we’ve become the world’s fourth largest economy.
— anand mahindra (@anandmahindra) May 25, 2025
It’s no small achievement. Japan has long been an economic… pic.twitter.com/28LgnC4Osx
Reflecting on the journey, Mahindra shared that during his business school days, the idea of India surpassing Japan in terms of GDP seemed like a far-fetched goal.
“When I was in business school, the idea of India overtaking Japan in GDP felt like a distant, almost audacious dream. Today, that milestone is no longer theoretical,” he said.
Until 2024, India held the fifth position in global economic rankings. The IMF’s April World Economic Outlook now projects India’s GDP at 4.19 trillion dollars in 2025, slightly ahead of Japan’s estimated figure.
“Japan has long been an economic colossus, with legendary productivity and resilience. That we’ve caught up is a testament to the ambition and ingenuity of millions of Indians across sectors, generations, and geographies,” Mahindra added.
He also emphasized that the next big goal should be improving the average income of citizens.
“India’s next leap must be in per capita GDP, not just overtaking Germany,” he said.
GDP, or Gross Domestic Product, is the total monetary value of all goods and services produced within a country over a year. It serves as a key indicator of a nation’s economic strength. Meanwhile, per capita income reflects how much, on average, each individual earns in a year, offering a clearer picture of economic well-being for citizens.
Mahindra further stated that long-term progress will require continued efforts in several areas.
“For us to keep rising, India needs sustained economic reforms, in governance, infrastructure, manufacturing, education, and capital access,” he said.
India’s per capita income has shown steady growth, nearly doubling from 1,438 dollars in 2013-14 to a projected 2,880 dollars in 2025.
Supporting this optimism, NITI Aayog CEO BVR Subrahmanyam confirmed that only the United States, China, and Germany are currently ahead of India. Quoting IMF data, he said, “In 2.5 to 3 years, we will be the third largest economy,” provided India continues with its current reform path.
Despite India’s rise in global rankings, a substantial gap still exists between it and the top economies. The United States is expected to maintain its lead with a projected GDP of 30.5 trillion dollars in 2025 — nearly seven times that of India. China follows with an estimated GDP of 19.2 trillion dollars, while Germany remains slightly ahead in third place.
The IMF expects India’s economy to grow at a rate of 6.2 percent in 2025-26, a modest decrease from the earlier forecast of 6.5 percent, owing to global uncertainties and trade challenges.
While India celebrates this key achievement, the focus ahead will be on ensuring that growth becomes more inclusive and that the benefits are widely shared across the population.
