India’s economic momentum poised to surpass Japan by 2025, says NITI Aayog
India is on track to become the world’s fourth-largest economy by the end of 2025, according to NITI Aayog member and veteran economist Arvind Virmani. His remarks reaffirm the International Monetary Fund’s (IMF) recent World Economic Outlook (WEO) report and coincide with comments made last week by NITI Aayog CEO BVR Subrahmanyam, who indicated India may have already surpassed Japan in economic size.
Virmani explained that although India is moving steadily toward becoming the world’s fourth-largest economy, a formal confirmation would require complete GDP data for the entire year.
He said, “India is in the process of becoming the fourth largest economy, and I am personally confident that will happen by the end of 2025. However, we need data covering all 12 months to officially declare it.”
Earlier, NITI Aayog CEO BVR Subrahmanyam had asserted that India had already overtaken Japan to become the fourth-largest economy. He made this claim while referring to figures from the International Monetary Fund (IMF), stating that India’s economy had crossed the USD 4 trillion mark.
Responding to that statement, Virmani urged caution. He pointed out that such claims hinge on the basis of comparison — whether they are drawn from full-year actual GDP numbers or future projections.
He also underlined that international comparisons of economic size are typically made using annual GDP figures at current US dollar prices. Subrahmanyam had earlier claimed, citing IMF data, that India has already overtaken Japan, declaring India a USD 4 trillion economy. Virmani, however, cautioned that such assertions depend on whether comparisons use year-end projections or actual data, noting that GDP comparisons are generally based on annual figures at US dollar current prices.
In its World Economic Outlook (WEO) report released in April, the International Monetary Fund (IMF) projected India’s GDP for 2025 at USD 4.187 trillion. This figure is slightly above Japan’s estimated USD 4.186 trillion, positioning India as the world’s fourth-largest economy, behind only the United States, China, and Germany.
The IMF also noted that India’s per capita income has nearly doubled over the past decade, from USD 1,438 in 2013-14 to USD 2,880 in 2025. In terms of economic growth, India’s GDP is expected to rise by 6.2 percent in 2025-26 — slightly slower than its earlier estimate of 6.5 percent, attributed to global uncertainties and trade tensions.
Nonetheless, the IMF observed that India’s growth remains more stable than many other economies, driven by resilient private consumption, especially in rural areas. In comparison, the global economy is projected to expand by 2.8 percent in 2025, down by 0.5 percentage points from earlier estimates, with 2026 growth forecasted at 3 percent.
India’s steady economic rise is being credited to its expanding manufacturing sector, infrastructure development, reforms aimed at improving business conditions, and a youthful, growing workforce. Policymakers remain optimistic that this momentum could position India as the third-largest economy globally in the next few years if current strategies and reforms continue effectively.
