India overtakes Japan with $4.18T GDP, becoming 4th largest economy. Growth driven by domestic demand; set to surpass Germany by 2028.

India’s economy has overtaken Japan’s to become the fourth largest in the world, according to a statement released by the government .

With an estimated GDP of USD 4.18 trillion, India is also the major economy with the highest rate of growth in the world. By 2028, it is expected to surpass Germany as the third-largest economy in the world.

The United States has the greatest economy in the world, with China coming in second.

“With GDP valued at USD 4.18 trillion, India has surpassed Japan to become the fourth-largest economy in the world and is poised to displace Germany from the third rank in the next 2.5 to 3 years with projected GDP of USD 7.3 trillion by 2030,” the Press Information Bureau release, which included images of the reforms in 2025, said.

In Q2 of FY 2025–2026, the country’s real Gross Domestic Product (GDP) increased by 8.2%, according to a government announcement. This represents a rise from the 7.8% growth in Q1 and the 7.4% growth in Q4 of FY 2024–2025. According to the announcement, “resilient domestic demand amidst global trade and policy uncertainties” drove the gain.

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Additionally, in the second quarter of 2025–2026, the GDP grew to a six-quarter high. The administration said that “domestic drivers—led by robust private consumption—played a central role in supporting this expansion.”

According to the press statement, the Reserve Bank of India (RBI) increased its forecast for GDP growth in FY 2025–2026 from 6.8% to 7.3%. It also emphasized growth estimates from global organizations.

“The World Bank projects 6.5% growth in 2026; Moody’s expects India to remain the fastest-growing G20 economy with growth of 6.4% in 2026 and 6.5% in 2027; the IMF has raised its projections to 6.6% for 2025 and 6.2% for 2026; the OECD forecasts 6.7% growth in 2025 and 6.2% for 2026; S&P expects growth of 6.5% in the current fiscal year and 6.7% in the next; the Asian Development Bank has raised its 2025 forecast to 7.2%; and Fitch has increased its FY26 projection to 7.4% due to stronger consumer demand,” the release says.