India vs Japan GDP Rank - A $1B Plot Twist

India is projected to become the world’s 4th-largest economy in 2025, nudging past Japan by just $1 billion, according to IMF estimates. But hold the headlines – 2024 data still shows Japan ahead. Let’s fact-check the numbers and decode what “4th largest” really means.

NITI Aayog CEO B.V.R. Subrahmanyam recently claimed that India has surpassed Japan to become the world’s fourth-largest economy, citing data from the IMF. Before examining the accuracy of this statement, let’s first understand what it means to be the “4th largest economy.” Let’s get to that claim in a bit.

What does “4th largest economy” mean?

Refers to a country that ranks fourth globally by the size of its economy.
The ranking is based on Nominal GDP – the total value of goods and services produced, measured at current market prices.
For example: Let’s say India produced 100 cars at ₹5 lakh each in 2023 → Nominal GDP from this = ₹5 crore.
If in 2024 the same 100 cars cost ₹6 lakh each, → Nominal GDP = ₹6 crore.
Even though production hasn’t increased, nominal GDP has risen due to price inflation.
Nominal GDP is not adjusted for inflation and is commonly used for international comparisons.

Why does the size of an economy matter?

A larger GDP suggests a bigger market size and greater investment potential.
Reflects the overall scale of production, consumption, and investment activity in the country.
It indicates a stronger global economic influence.

Now, regarding the claim of India being the 4th largest economy

You can access country-level GDP data for India and Japan from IMF sources here
The numbers are in billion USD — so just divide by 1,000 to get to trillions (because we like our trillions neat and tidy).
In 2024, India’s GDP stood at $3.91 trillion, while Japan’s was $4.03 trillion. Looking ahead to 2025, India’s number is $4.187 trillion, just edging past Japan at $4.186 trillion.
But wait… what does “2025” mean here? When the IMF or other global agencies say “2025”, they’re referring to the calendar year—Jan 1 to Dec 31, not your April-to-March fiscal year.
The 2025 figures are projections—best-case economic crystal ball stuff. So yes, India may overtake Japan… But maybe hold off the fireworks until the actual numbers land.

How the World’s Biggest Economies Have Moved

The chart displays the GDP rankings of major economies in the years 2000 and 2024. The numbers in red represent each country’s rank in 2000, while those in green indicate their rank in 2024. A lower rank corresponds to a larger GDP, while a higher rank reflects a relatively smaller economic size.

Developed economies like Germany and Japan remain strong but are being outpaced by emerging markets in growth rate.
With China and India climbing rapidly, the global economic centre of gravity is clearly shifting eastward.

India’s rise through the global GDP rankings is a testament to its expanding economic footprint and growing global relevance. While the IMF projections for 2025 suggest India will edge past Japan to become the world’s fourth-largest economy, it’s worth remembering that these are forward-looking estimates, not confirmed outcomes.

The bigger picture, however, is clear: emerging economies, particularly in Asia, are on the rise. As India continues to grow, the global balance of economic power is gradually shifting eastward. But for now, let’s acknowledge the momentum—and save the champagne for when the numbers are final.

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