- India overtakes Japan with GDP of $4.18 trillion
- Economy grows 8.2% in Q2 FY26, a six-quarter high
- RBI raises FY26 growth forecast to 7.3%
- Domestic demand and low inflation drive expansion
GG News Bureau
New Delhi, 29th Dec: India has overtaken Japan to become the world’s fourth-largest economy, with its gross domestic product valued at $4.18 trillion, and is now poised to displace Germany from the third position within the next two-and-a-half to three years, according to an official statement released on Monday.
The statement said India is projected to reach a GDP of $7.3 trillion by 2030, reflecting strong and sustained growth momentum. The country’s economy expanded to a six-quarter high in the second quarter of FY 2025–26, underscoring its resilience despite ongoing global trade and policy uncertainties.
India’s real GDP grew by 8.2 per cent in Q2 FY26, up from 7.8 per cent in the previous quarter and 7.4 per cent in the fourth quarter of FY25. Real gross value added (GVA) rose by 8.1 per cent, supported by robust performance in the industrial and services sectors. High-frequency indicators show continued strength, with inflation remaining below the lower tolerance threshold, declining unemployment and improving export performance.
The Reserve Bank of India has revised its GDP growth forecast for FY26 upward to 7.3 per cent from an earlier estimate of 6.8 per cent. Officials attributed the strong domestic growth to factors such as resilient consumption demand, rationalisation of income tax and GST, softer crude oil prices, front-loaded government capital expenditure and accommodative monetary conditions.
Looking ahead, favourable agricultural prospects, continued benefits of GST reforms, stable inflation, and strong corporate and financial sector balance sheets are expected to sustain economic activity. External drivers, particularly services exports and ongoing trade and investment negotiations, are projected to further support growth.
Describing the current macroeconomic environment as a “goldilocks period” of high growth and low inflation, the statement said India is among the world’s fastest-growing major economies and remains well positioned to sustain its upward trajectory as it works toward becoming a high middle-income country by 2047.
