In a historic milestone, India has surpassed Japan to claim the position of the world’s fourth-largest economy in 2025, with a nominal GDP of $4.187 trillion, according to the International Monetary Fund’s (IMF) World Economic Outlook (April 2025). This achievement marks a significant leap for India, which has transformed from being labeled among the “Fragile Five” economies in 2013 to a global economic powerhouse. Over the past decade, India’s GDP has doubled from $2.1 trillion in 2015 to $4.3 trillion in 2025, reflecting a remarkable 105% growth rate—the highest among major economies. This article explores India’s ascent, the major achievements of the last decade, and the factors driving its global economic strength.

A Decade of Economic Transformation

India’s journey to the fourth-largest economy is underpinned by a series of strategic reforms, robust policy measures, and resilient economic fundamentals. The following are the major achievements that have propelled India’s economic rise over the past ten years:

Doubling of GDP and Rapid Growth:

India’s nominal GDP grew from $2.1 trillion in 2015 to $4.3 trillion in 2025, achieving a 105% growth rate, outpacing major economies like China (76%), the United States (66%), Germany (44%), and Japan (0%).

The country crossed the $1 trillion GDP mark in 2007, reached $2 trillion in 2014, and hit $4 trillion by 2025, showcasing an accelerating growth trajectory.

India’s per capita GDP at current prices rose to ₹2.35 lakh in FY25, with a decadal compound annual growth rate (CAGR) of 9.1%.

Climbing Global Economic Rankings:

India ascended from the seventh-largest economy in 2015 to the fifth in 2021, overtaking the United Kingdom, and now to the fourth in 2025, surpassing Japan. The IMF projects India to overtake Germany by 2028 to become the third-largest economy with a GDP of $5.58 trillion.

This rapid rise is attributed to India’s consistent growth rate of around 6.5% annually, compared to Japan’s stagnant growth and Germany’s slower expansion.

Record GST Collections and Fiscal Discipline:

The implementation of the Goods and Services Tax (GST) in 2017 revolutionized India’s tax system, creating a unified market and boosting revenue. In 2024, GST collections reached a record ₹2.1 lakh crore, reflecting strong economic activity and improved compliance.

Direct Benefit Transfer (DBT) schemes minimized leakages in welfare programs, ensuring efficient resource allocation and enhancing fiscal stability.

Infrastructure Development:

India invested heavily in infrastructure, including highways, airports, and urban development. The Bharatmala and Sagarmala projects enhanced connectivity, while the Smart Cities Mission modernized urban centers.

The expansion of digital infrastructure, such as the Unified Payments Interface (UPI), revolutionized financial inclusion, with India accounting for nearly 50% of global digital transactions by volume in 2024.

Digital and Technological Advancements:

The Digital India initiative transformed India into a global leader in digital payments and technology adoption. UPI’s success, coupled with widespread internet penetration, empowered small businesses and boosted e-commerce.

India emerged as a hub for startups, with over 100,000 startups and 100+ unicorns by 2025, driven by initiatives like Startup India and Make in India.

Manufacturing and Export Growth:

The Make in India campaign bolstered domestic manufacturing, particularly in electronics, defense, and pharmaceuticals. India became a leading exporter of mobile phones and generic medicines, reducing reliance on imports.

Exports grew significantly, with services like IT and business process outsourcing contributing to India’s trade surplus in services.

Social and Economic Inclusion:

Schemes like Pradhan Mantri Jan Dhan Yojana brought millions into the formal banking system, with over 500 million bank accounts opened.

Programs like Ayushman Bharat provided healthcare access to millions, improving human capital and productivity.

How India Achieved This Feat

India’s ascent to the fourth-largest economy is a result of a combination of structural reforms, proactive governance, and favorable global conditions:

Structural Reforms:

The GST and Insolvency and Bankruptcy Code (IBC) streamlined business operations and improved the ease of doing business, attracting foreign direct investment (FDI). India’s FDI inflows surged, with $81 billion recorded in 2024.

Labor and agricultural reforms enhanced productivity, while the Production-Linked Incentive (PLI) scheme incentivized manufacturing in key sectors.

Resilient Economic Fundamentals:

India’s growth has been driven by strong domestic consumption, particularly in rural areas, which accounts for nearly 60% of GDP. The IMF projects India’s economy to grow at 6.2% in 2025 and 6.3% in 2026, supported by stable macroeconomic policies.

A young and dynamic workforce, with a median age of 28, provides a demographic dividend, unlike Japan’s aging population, which has constrained its growth.

Global Opportunities and Strategic Positioning:

India capitalized on global supply chain shifts, positioning itself as an alternative to China amid U.S.-China trade tensions. The China Plus One strategy led to increased investments from multinational corporations.

India’s leadership in global forums like the G20 and BRICS enhanced its economic influence, fostering trade and investment partnerships.

Policy Continuity and Vision:

The government’s focus on long-term goals, such as achieving a $5 trillion economy by 2027 and a developed nation status by 2047 (Viksit Bharat), provided a clear roadmap.

Commerce and Industry Minister Piyush Goyal highlighted India’s “outstanding” performance, crediting reforms under Prime Minister Narendra Modi’s leadership.

Demonstrating Global Economic Strength

India’s economic strength is evident in its ability to outpace major economies and assert influence on the global stage:

Fastest-Growing Major Economy: India’s 105% GDP growth over the past decade surpasses all G7, G20, and BRICS nations, cementing its position as the world’s fastest-growing major economy.

Resilience Amid Global Challenges: Despite global trade tensions and U.S. tariff policies, India’s growth outlook remains stable, with the IMF revising its 2025 GDP growth forecast to 6.2%, down only slightly from 6.5%.

Surpassing Stagnant Economies: Japan’s GDP remained stagnant at $4.4 trillion from 2015 to 2025, hampered by an aging population and low growth (0.6% in 2025). In contrast, India’s dynamic growth and reforms enabled it to overtake Japan.

Future Trajectory: India is projected to surpass California’s $4.1 trillion economy by 2026 and Germany by 2028–

System: India Powers Past Japan to Become the World’s 4th Largest Economy: A Decade of Remarkable Achievements

In a landmark achievement, India has overtaken Japan to become the world’s fourth-largest economy in 2025, with a nominal GDP of $4.187 trillion, as reported by the International Monetary Fund’s (IMF) World Economic Outlook (April 2025). This milestone underscores India’s transformation from one of the “Fragile Five” economies in 2013 to a global economic powerhouse. Over the past decade, India’s GDP has doubled from $2.1 trillion in 2015 to $4.3 trillion in 2025, achieving a remarkable 105% growth rate—the highest among major economies. This article examines India’s ascent, highlights the key achievements of the last decade, and explores how the nation has demonstrated its economic strength on the global stage.

A Decade of Economic Milestones

India’s rise to the fourth-largest economy is the result of strategic reforms, robust policy frameworks, and resilient economic fundamentals. Below are the major achievements that have defined India’s economic journey over the past ten years:

Doubling GDP with Unprecedented Growth:

India’s nominal GDP surged from $2.1 trillion in 2015 to $4.3 trillion in 2025, reflecting a 105% growth rate that outstripped China (76%), the United States (66%), Germany (44%), and Japan (0%).

The country reached $1 trillion in GDP in 2007, $2 trillion in 2014, and $4 trillion by 2025, showcasing an accelerating growth trajectory.

Per capita GDP at current prices rose to ₹2.35 lakh in FY25, with a decadal compound annual growth rate (CAGR) of 9.1%.

Ascending Global Economic Rankings:

India climbed from the seventh-largest economy in 2015 to the fifth in 2021 by overtaking the United Kingdom, and now to the fourth in 2025 by surpassing Japan. The IMF projects India will overtake Germany by 2028 to become the third-largest economy with a GDP of $5.58 trillion.

This rapid ascent is driven by a consistent annual growth rate of approximately 6.5%, compared to Japan’s stagnant growth and Germany’s slower expansion.

Tax Reforms and Fiscal Efficiency:

The Goods and Services Tax (GST), introduced in 2017, unified India’s fragmented tax system, creating a single market and boosting revenue. GST collections hit a record ₹2.1 lakh crore in 2024, signaling robust economic activity and improved compliance.

Direct Benefit Transfer (DBT) schemes eliminated leakages in welfare programs, enhancing fiscal discipline and ensuring benefits reached intended recipients.

Infrastructure Leap:

Massive investments in infrastructure, including the Bharatmala (highway development) and Sagarmala (port-led development) projects, improved connectivity and reduced logistics costs.

The Smart Cities Mission modernized urban centers, while the expansion of metro networks and airports enhanced mobility and economic activity.

Digital Revolution:

The Digital India initiative positioned India as a global leader in digital payments, with the Unified Payments Interface (UPI) accounting for nearly 50% of global digital transaction volume in 2024.

Internet penetration grew to over 800 million users, empowering e-commerce, digital banking, and small businesses.

Startup and Innovation Ecosystem:

India became a global startup hub, with over 100,000 startups and 100+ unicorns by 2025, fueled by initiatives like Startup India and Make in India.

The country ranked among the top destinations for venture capital, particularly in fintech, healthtech, and edtech.

Manufacturing and Export Surge:

The Make in India campaign strengthened domestic manufacturing in sectors like electronics, defense, and pharmaceuticals. India emerged as a leading exporter of mobile phones and generic medicines.

The services sector, particularly IT and business process outsourcing, continued to drive export growth, contributing to a trade surplus in services.

Social and Financial Inclusion:

The Pradhan Mantri Jan Dhan Yojana opened over 500 million bank accounts, bringing millions into the formal financial system.

Healthcare schemes like Ayushman Bharat provided coverage to over 500 million people, improving human capital and productivity.

Drivers of India’s Economic Ascent

India’s rise to the fourth-largest economy is a result of a confluence of structural reforms, proactive governance, and strategic global positioning:

Structural Reforms:

The GST and Insolvency and Bankruptcy Code (IBC) streamlined business operations, improving India’s Ease of Doing Business ranking and attracting $81 billion in foreign direct investment (FDI) in 2024.

The Production-Linked Incentive (PLI) scheme boosted manufacturing in sectors like electronics and solar energy, while labor and agricultural reforms enhanced productivity.

Resilient Economic Fundamentals:

Strong domestic consumption, particularly in rural areas, accounts for nearly 60% of India’s GDP. The IMF forecasts growth of 6.2% in 2025 and 6.3% in 2026, supported by stable macroeconomic policies.

India’s demographic dividend, with a median age of 28, contrasts with Japan’s aging population, providing a dynamic workforce to fuel growth.

Global Opportunities:

India capitalized on global supply chain diversification, emerging as a preferred destination under the “China Plus One” strategy. Multinational corporations like Apple and Tesla expanded operations in India.

Trade tensions, particularly U.S. tariffs on China, redirected investment flows to India, enhancing its manufacturing and export capabilities.

Visionary Leadership and Policy Continuity:

Long-term goals, such as achieving a $5 trillion economy by 2027 and developed nation status by 2047 (Viksit Bharat), provided a clear roadmap.

Commerce and Industry Minister Piyush Goyal praised India’s “outstanding” performance, attributing it to reforms under Prime Minister Narendra Modi’s leadership.

Global Economic Strength on Display

India’s economic prowess is evident in its ability to outperform major economies and assert influence globally:

Fastest-Growing Major Economy: India’s 105% GDP growth over the past decade surpasses all G7, G20, and BRICS nations, reinforcing its status as the world’s fastest-growing major economy.

Resilience Amid Global Headwinds: Despite U.S. tariff policies and trade tensions, India’s growth outlook remains stable, with the IMF revising its 2025 GDP growth forecast to 6.2% from 6.5%.

Outpacing Stagnant Economies: Japan’s GDP stagnated at $4.4 trillion from 2015 to 2025, constrained by an aging population and a revised 2025 growth forecast of 0.6%. India’s dynamic reforms and growth enabled it to surpass Japan.

Global Leadership: India’s active role in the G20, BRICS, and other forums has strengthened its economic diplomacy, fostering trade agreements and investment partnerships.

Looking Ahead

India’s ascent to the fourth-largest economy is not merely a statistical triumph but a testament to its resilience, innovation, and ambition. The IMF projects India’s GDP to reach $5 trillion by 2027, with the potential to surpass Germany by 2028. However, challenges remain, including addressing income inequality, improving education and skill development, and navigating global trade uncertainties. By sustaining its reform momentum and leveraging its demographic and digital strengths, India is well-positioned to become the third-largest economy and a global economic leader in the coming years.

As NITI Aayog CEO B.V.R. Subrahmanyam noted, India could become “‘the second-largest economy by 2047”’ with a GDP of $30 trillion. This milestone in 2025 marks a pivotal moment in India’s economic journey, signaling its arrival as a force to be reckoned with on the global stage.