Why The World’s Top Institutions Are Betting Big On India’s Economic Rise?

India has officially surpassed Japan as the fourth largest economy in the world, only the U.S, China, and Germany stand ahead, according to a recent address delivered by Niti Aayog's CEO BVR Subrahmanyam.

BVR Subrahmanyam, CEO, NITI Aayog, said," We are the fourth largest economy as I speak. We are a USD 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, and if we stick to, you know, what is being planned, what is being thought through, it’s a matter of another 2, 2.5 to 3 years; we would become the third largest economy.

“It’s only the United States, China, and Germany which are larger, and if we stick to what is being planned, what is being thought through, it’s a matter of another 2, 2.5 to 3 years; we would become the third largest economy,” Subrahmanyam said.

As per the IMF’s April edition of the World Economic Outlook report, the nominal GDP of India for fiscal 2026 is expected to surge around USD 4,187.017 billion. This is marginally more than the likely GDP of Japan, which is estimated at USD 4,186.431 billion.

India was the fifth largest economy in the world till 2024. In 2014, 67 years after independence, India’s economy stood at $2 trillion. After the regime change at the central administration it bolstered to USD 3 trillion, and reportedly added another trillion in a period of four years.

Key Factors Behind India's Positive Economic Outlook

The International Monetary fund has projected the south Asian country as the fastest-growing major economy over the upcoming two years.

This indicates that India will remain the fastest-growing major economy over the next two years. India’s economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a considerable lead over its  regional and global competitors, as per IMF's World Economic Outlook's April 2025 report.

According to the top data and analytics provider, S&P Global, India is on path to become the world’s third-largest economy by fiscal 2030-31, on the backs of new growth in manufacturing, continued gains from agriculture, services and focus on energy security and biofuels, says a study by S&P Global.

Further, it said, India remains the world’s fastest-growing large economy despite a slowdown in real GDP growth in fiscal 2024-25. It has moderate dependence on external trade for growth, which cushions it somewhat from ongoing shifts in global trade and tariff policies."