Beijing: China has acknowledged India's ascent as the world's fourth-largest economy, surpassing Japan in a significant shift in the global economic order. The development, confirmed by the International Monetary Fund (IMF) in April 2025, places India's GDP at $4.187 trillion, marginally ahead of Japan's $4.186 trillion.
Chinese commentators have lauded India's "true strength" and "remarkable economic resilience" in the face of global economic headwinds. This milestone, according to analysts, reflects India's robust service sector, rising manufacturing, and strategic reforms. The recognition from China, a major economic player itself, underscores the growing importance of India in the global landscape.
"India's rise is a testament to its economic transformation and potential," stated a recent editorial in the People's Daily, a state-run newspaper. "The country's youthful workforce and increasing integration into the global economy have been key drivers of its success."
The surpassing of Japan by India carries symbolic weight. Japan's economy experienced minimal growth of 0.1% in 2024, weighed down by factors such as weak household spending and persistent inflation. The Bank of Japan's cautious interest rate hikes and looming US tariffs have further exacerbated the country's economic challenges.
In contrast, India's growth has been fueled by strategic policy reforms, including the Goods and Services Tax (GST), direct benefit transfers, and production-linked incentives. Moreover, global investment inflows and a burgeoning digital economy, with over 800 million internet users, have contributed to India's economic momentum.
NITI Aayog CEO BVR Subrahmanyam has expressed confidence that India will overtake Germany within the next 2.5 to 3 years to become the world's third-largest economy. This optimism is supported by projections from the IMF, which anticipates continued strong growth for the Indian economy.
The rise of India to the fourth position globally is more than a statistical achievement; it signifies the country's increasing global influence and its potential to shape the future of the global economy. It also brings with it increased expectations for India to take on a leadership role in addressing global challenges such as climate change, digital governance, and trade.
While celebrating this achievement, Indian policymakers and business leaders are also cognisant of the need to ensure that economic growth translates into improved health, well-being, and dignity for all citizens. The focus is now on blending economic progress with investments in healthcare, job creation, and education to achieve the vision of a "Viksit Bharat" (Developed India) by 2047.
The world is closely observing India's economic trajectory. Investors, policymakers, and businesses worldwide increasingly view India not just as an emerging market, but as a significant global force. As India continues its ascent, its role in shaping the global economic and political landscape is set to become even more prominent.
