India Becomes World’s Fourth Largest Economy

In 2025, India’s economy faced a challenging global situation but still achieved several important milestones. The economy continued to grow despite higher US tariffs. Inflation slowed down, giving some relief to the Reserve Bank of India. Strong tax collections also helped reduce the fiscal deficit to some extent. During the year, India signed new trade agreements with countries such as the United Kingdom, the European Free Trade Association, New Zealand and Oman, which boosted trade and global engagement.

One of the biggest highlights of the year was India moving ahead of Japan in terms of nominal GDP. According to estimates by the International Monetary Fund (IMF), India became the world’s fourth-largest economy. This achievement, along with steady growth in each quarter and positive feedback from institutions like the World Bank and IMF, shaped India’s economic progress in 2025.

As per the IMF’s World Economic Outlook, India’s GDP was estimated at $4.187 trillion, slightly higher than Japan’s $4.186 trillion. Economists said this was more than just a symbolic achievement. It showed India’s strong and steady growth, supported by rising domestic demand, increased investment and long-term economic reforms, even during a period of global uncertainty.