India has surpassed Japan and become the world's fourth-largest economy, with a projected Gross Domestic Product (GDP) of 4.187 billion dollars for the financial year 2025-26.
Industrialist Anand Mahindra said the "milestone" was a dream come true and reminded the country to "stay dissatisfied."
"It is no small achievement," Mr Mahindra wrote on X.
GDP (Gross Domestic Product) is the total amount of money a country makes by making things and doing services in one year. It shows how big and strong the country's economy is.
When Anand Mahindra was in business school, the idea of India overtaking Japan in GDP felt like a "distant, almost audacious dream", the Mahindra Chairperson said. "Today, that milestone is no longer theoretical," he said.
Until 2024, India ranked fifth. According to the International Monetary Fund's (IMF) April World Economic Outlook, India's GDP is projected to reach 4.19 trillion dollars in 2025, marginally ahead of Japan's estimated figure.
"Japan has long been an economic colossus, with legendary productivity and resilience. That we've caught up is a testament to the ambition and ingenuity of millions of Indians across sectors, generations, and geographies," he said.
Mr Mahindra said the next goal must be to raise India's per capita income. "India's next leap must be in per capita GDP, not just overtaking Germany," he said.
Per capita income is how much money each person in a country makes on average in a year. It shows how much people earn, on average.
"For us to keep rising, India needs sustained economic reforms, in governance, infrastructure, manufacturing, education, and capital access," he added.
India's per capita income has doubled over the last decade, from 1,438 dollars in 2013-14 to 2,880 dollars expected in 2025.
On Saturday, NITI Aayog CEO BVR Subrahmanyam cited IMF data to confirm that only the US, China, and Germany are ahead of India. He added that if India stays on course with its current policies and reforms, it could move up another spot. "In 2.5 to 3 years, we will be the third largest economy," he said.
Despite the new ranking, India's gap with the top economies remains wide. The United States, which continues to lead as the world's largest economy, is projected to have a GDP of 30.5 trillion dollars in 2025, nearly seven times India's estimated GDP of 4.19 trillion dollars.
China, holding the second position, is expected to post a GDP of around 19.2 trillion dollars. Germany ranks third, just ahead of India.
The IMF has predicted India's economy will grow at 6.2 per cent in 2025-26, a slight dip from its earlier estimate of 6.5 per cent, citing trade tensions and global uncertainty.
