India officially becomes fourth-largest economy, may displace Germany from third spot by 2030

New Delhi: The Indian economy has achieved yet another milestone with the country officially surpassing Japan to become the fourth-largest economy in the world.

According to an official statement, India now has a Gross Domestic Product (GDP) of USD 4.18 trillion. 
According to an official report on the country's economic reforms in 2025 India is expected to overtake Germany as the third largest economy by 2030.

What is India’s GDP growth rate?

The Indian economy has registered a GDP growth of 8.2 per cent in the second quarter of 2025–26 and continues to be the fastest-growing major economy. The economy had grown at a rate of 7.8 per cent in the first quarter of 2025-26. The rate in the last quarter of the previous financial year was 7.4 per cent.

"With GDP valued at USD 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 2.5 to 3 years with a projected GDP of USD 7.3 trillion by 2030," the official statement said.

What are the reasons behind India’s economic surge?

According to the official statement, domestic demand driven by strong private consumption, has played a crucial role in sustaining India’s GDP growth rate.

The United States continues to remain the world's largest economy while Asian power house China is at the second spot.

What do global agencies say?

Global financial institutions have painted a rosy picture of India's economic outlook. The World Bank expects the Indian economy to grow at 6.5 per cent in 2026, while Moody's have predicted that India will continue to be the fastest-growing G20 economy with a growth rate of 6.4 per cent growth in 2026 and 6.5 per cent in 2027. 

According to the IMF, the Indian economy will expand at 6.6 per cent in 2025 and 6.2 per cent in 2026. 

S&P has predicted 6.5 per cent growth for the Indian economy during the current fiscal and 6.7 per cent for 2026. The Asian Development Bank on the other hand, has forecasted 7.2 per cent for this fiscal, while Fitch is anticipating 7.4 per cent growth in 2026. 

"India is among the world's fastest-growing major economies and is well-positioned to sustain this momentum. With the ambition of attaining high middle-income status by 2047, the country is building on strong foundations of economic growth, structural reforms, and social progress," the government statement added.

What does macroeconomic indicators say?

The release went on to inform that inflation remains below the lower tolerance threshold while unemployment continues to decline and exports are showing gradual improvement. 

With conditions favourable for healthy credit flows to the commercial sector, urban consumption has improved further supporting demand conditions.