India is projected to become the world’s fourth-largest economy in 2025, overtaking Japan, according to the International Monetary Fund’s (IMF) latest World Economic Outlook released in April 2025. The report estimates India’s nominal GDP for FY26 at $4,187.017 billion, narrowly exceeding Japan’s expected GDP of $4,186.431 billion.
Until 2024, India held the position of the fifth-largest economy globally. With the upcoming shift, IMF forecasts India to continue its economic ascent and surpass Germany to become the third-largest economy by 2028. At that point, India’s GDP is expected to reach $5,584.476 billion, compared to Germany’s $5,251.928 billion. The report also anticipates India crossing the $5 trillion mark by 2027, with a GDP of $5,069.47 billion.
The United States and China are expected to retain their positions as the world’s two largest economies through 2025 and beyond, as per IMF projections.
However, the report cautions that the global economic framework, which has shaped international trade and finance for the past eight decades, is undergoing a significant transformation. As part of its latest update, the IMF has revised India’s GDP growth forecast for 2025 to 6.2%, down from the earlier estimate of 6.5% published in January.
The downgrade reflects rising global uncertainty and trade tensions, particularly in light of decisions on tariffs under U.S. President Donald Trump. “For India, the growth outlook remains relatively stable at 6.2 percent in 2025, supported by private consumption, especially in rural areas,” the report stated. “However, this figure is 0.3 percentage points lower than the January 2025 WEO Update due to escalating trade tensions and broader global uncertainty.”