India is poised to overtake Japan to become the world&rsquo;s fourth largest economy in 2025 and is expected to rise further to third place by 2028, according to the International Monetary Fund&rsquo;s (IMF) latest projections.
As per the April 2025 edition of the IMF&rsquo;s World Economic Outlook, India&rsquo;s nominal GDP is forecast to reach $4,187.017 billion in 2025, enabling it to surpass Japan in the global economic rankings.&nbsp;
The report also highlights that India will retain its position as the fastest-growing major economy over the next two years, with projected growth rates of 6.2 percent in 2025 and 6.3 percent in 2026.
These projections mark a revision from the IMF&rsquo;s January 2025 update. The downward adjustment is attributed to rising global trade tensions and increased economic uncertainty, which have impacted forecasts across several major economies.
In contrast, the global economy is expected to grow at a slower pace. The IMF estimates worldwide growth at 2.8 percent in 2025 and 3.0 percent in 2026, significantly below India&rsquo;s forecasted performance.
Japan, currently the world&rsquo;s third largest economy, has seen its outlook revised downward by the IMF. The fund has lowered Japan&rsquo;s 2025 growth projection from 1.1 percent to 0.6 percent, citing the likely adverse effects of recently imposed US tariffs on Japanese exports.
The trade dispute intensified on April 2, when former US President Donald Trump introduced a new wave of tariffs, prompting economic volatility across global markets. However, one week later, Trump announced a 90-day pause on the implementation of these new tariffs for all countries except China, which was instead targeted with elevated retaliatory duties.
In a separate development, Moody&rsquo;s Ratings on Tuesday reduced India&rsquo;s GDP growth projection for the fiscal year 2026 to 6.3 percent, down from its earlier forecast of 6.5 percent. The agency cited escalating tensions between India and Pakistan, along with growing global instability, as key reasons for the revision.
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PM Narendra Modi with FM Nirmala Sitharaman

IMF projects India to surpass Japan in 2025 with $4.19 trillion GDP, remaining fastest-growing major economy

India to Become 4th Largest Economy in 2025: IMF

IMF projects India to surpass Japan in 2025 with $4.19 trillion GDP, remaining fastest-growing major economy

May 6, 2025 | 18:47 IST