India Overtakes Japan—Is Germany Next? PM Narendra Modi’s Push To Become World’s 3rd Largest Economy

India’s economic rise is making headlines around the globe, and now Prime Minister Narendra Modi has set a bold target: moving India from the 4th to the 3rd largest economy in the world.

During a recent address, PM Modi said, “The pressure is now to move from 4th to 3rd position,” pointing to the country’s impressive growth despite global challenges such as the COVID-19 pandemic and a volatile world economy.

So, can India overtake Germany and become the third-largest economy in the world? Let’s break it down.

India Overtakes Japan

India has already achieved a major milestone by overtaking Japan to become the world’s fourth-largest economy. This is supported by recent data from the International Monetary Fund (IMF), which places India’s nominal GDP at $4.187 trillion in 2025, just ahead of Japan’s $4.186 trillion.

This achievement reflects the strength of India’s economic fundamentals, especially in areas like domestic demand, digital innovation, and services growth. Despite global uncertainty, India’s ability to sustain high growth has set it apart from many developed economies.

Also Read: Which Sectors And States Are Leading The FDI Surge? Full Details

Can India Overtake Germany?

Looking ahead, the focus shifts to whether India can move past Germany to take the third spot. According to NITI Aayog CEO B.V.R. Subrahmanyam, this could happen within the next 2.5 to 3 years if India continues on its current economic path.

IMF projections show India’s GDP reaching $5.58 trillion by 2028, compared to Germany’s $5.25 trillion.

The difference is mainly due to India’s higher growth rate, while Germany is expected to see stagnant growth due to ongoing trade tensions and slowing demand in Europe.

What’s Driving India’s Growth?

India’s rise is driven by a combination of factors. A large and youthful population supports strong domestic consumption, which remains a key growth engine. Rapid urbanisation, digital transformation, and increased investment in infrastructure are boosting productivity and innovation.

Additionally, reforms in manufacturing, services, and financial sectors are creating a more resilient and globally competitive economy. PM Modi has emphasised that urban innovation and better productivity will be essential to sustain this momentum.

Challenges to Watch

Despite the optimism, India faces several challenges. Global trade tensions could disrupt export markets, while geopolitical uncertainties may influence foreign investment flows.

Domestically, structural issues like unemployment, income inequality, and regulatory bottlenecks still pose risks.

Addressing these will be crucial to ensure that growth is not just high, but also inclusive and sustainable over the long term.