Modinomics: How India Rose from 10th Largest Economy in 2014 to 4th Largest in 2025

India’s economic ascent has hit a historic milestone. In a development that marks a decade of accelerated growth and reforms, India has officially become the world’s fourth-largest economy, overtaking Japan—a jump from its 10th position in 2014 when Prime Minister Narendra Modi first took office.

Under Modi’s leadership, India’s nominal GDP has more than doubled, climbing from around $2 trillion in 2014 to a projected $4.27 trillion in 2025, according to the latest figures from the International Monetary Fund (IMF). The achievement reflects a transformative economic journey, driven by structural reforms, infrastructure expansion, digital innovation, and a renewed focus on manufacturing and investment.

The official confirmation came from BVR Subrahmanyam, CEO of NITI Aayog, who cited IMF data while speaking at the 10th Governing Council Meeting of the policy think tank.
“We are the fourth largest economy as I speak. We are a $4 trillion economy as I speak, and this is not my data. This is IMF data. India today is larger than Japan. It's only the United States, China, and Germany which are larger,” Subrahmanyam said.

 

Growth Rates: India vs World

Since 2014, India's real GDP growth has consistently outpaced global averages. Prior to the pandemic, it maintained a robust 7–8% growth rate, with a temporary decline in 2020 followed by a strong recovery. For instance, in FY2023/24, India achieved a remarkable growth rate of 8.2%, leading all major economies. In contrast, most advanced economies have been growing at rates ranging from 1% to 3%. Looking ahead, IMF forecasts indicate India's growth for FY2024/25 and FY2025/26 will be around 6.2–6.5%. This stands in stark contrast to the projected global growth of approximately 3.3% during the same period, with China expected to grow at 4–5%. Among the G20 economies, India has recorded the highest nominal GDP increase over the past decade, while Japan's nominal GDP has remained largely stagnant, even showing slight decline from 2015 to 2024. In summary, India has emerged as the fastest-growing major economy in both real and nominal terms throughout the 2010s and early 2020s, significantly surpassing the global average growth rates.

India's Economic Climb: From 10th to 4th
India’s rise is not an overnight success but the result of steady economic growth over the past decade. In 2014, India was ranked 10th globally with a nominal GDP of around $2 trillion. Here's how the trajectory unfolded:
 

What’s Driving the Growth?
India’s rise under the Modi government has been attributed to:

Goods and Services Tax (GST): Streamlining Indirect Taxation

Introduced on July 1, 2017, the GST unified multiple indirect taxes into a single tax regime, simplifying the tax structure and reducing compliance burdens for businesses. This reform has significantly improved tax transparency and broadened the taxpayer base. 

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India Surges, Japan Stalls: The Tale of Two Asian Economies

Digital India and UPI: Expanding Financial Inclusion

The Digital India initiative, coupled with the launch of the Unified Payments Interface (UPI) in 2016, has transformed the digital payments landscape in India. UPI enables instant, real-time bank-to-bank transactions, promoting a cashless economy and enhancing financial inclusion, especially in rural and underserved areas. 

Production Linked Incentive (PLI) Schemes: Boosting Manufacturing

Launched in 2020, the PLI schemes aim to enhance domestic manufacturing capabilities and attract foreign investments across 14 key sectors. The initiative has been particularly successful in the electronics sector, with India becoming the world's second-largest mobile phone manufacturer. 
 

Infrastructure Expansion: PM Gati Shakti and National Logistics Policy

The PM Gati Shakti National Master Plan and the National Logistics Policy, introduced in 2021 and 2022 respectively, aim to develop an integrated and efficient logistics ecosystem in India. These initiatives focus on reducing logistics costs, improving supply chain efficiency, and enhancing the competitiveness of Indian goods in the global market. T

Welfare Schemes: Enhancing Rural Consumption

Flagship welfare programs like the Pradhan Mantri Awas Yojana (PMAY), Jal Jeevan Mission, and Direct Benefit Transfer (DBT) schemes have played a crucial role in improving rural livelihoods and stimulating consumption

What Lies Ahead
Looking forward, the IMF forecasts that India could surpass Germany by 2028 to become the third-largest economy, driven by continued policy stability, demographic advantage, and digital transformation.