In a historic economic milestone, India has officially overtaken Japan to become the world’s fourth-largest economy, with a nominal GDP projected at $4.19 trillion for the fiscal year 2025-26, according to the International Monetary Fund (IMF). This achievement marks a significant shift in the global economic landscape and highlights India’s rapid growth trajectory over the past decades.
Anand Mahindra Reflects on India’s Economic Journey
Anand Mahindra, Chairman of the Mahindra Group, expressed his pride and amazement at this achievement, recalling that when he was in business school, the idea of India surpassing Japan’s economy seemed like a distant and audacious dream. Today, he says, this milestone is no longer theoretical but a proud reality.
Mahindra acknowledged Japan’s long-standing reputation as an economic powerhouse with legendary productivity and resilience. He emphasized that India’s rise to the fourth position is a testament to the ambition, ingenuity, and hard work of millions of Indians across sectors, generations, and regions.
Celebrating the Milestone, But Staying Hungry for More
While celebrating this landmark, Anand Mahindra urged the nation to remain “dissatisfied” and focused on the next big leap: improving India’s per capita GDP. He pointed out that overtaking Japan in total GDP is just the beginning, and the real challenge lies in enhancing the average income and living standards of every Indian.
He stressed the importance of sustained economic reforms in key areas such as governance, infrastructure, manufacturing, education, and capital access to maintain and accelerate this growth momentum.
The Economic Reforms Behind India’s Rise
India’s economic transformation began in earnest in 1991 with liberalization policies that dismantled the License Raj, eased trade restrictions, and encouraged foreign investment. More recent reforms, including the rollout of the Goods and Services Tax (GST) in 2017 and initiatives like ‘Make in India’ and ‘Atmanirbhar Bharat,’ have further bolstered domestic industry and attracted global investors.
These reforms have been pivotal in shaping India’s market-driven economy and fueling its rapid GDP growth, enabling the country to surpass Japan, which has traditionally been an economic colossus.
What Lies Ahead: Targeting the Third Largest Economy
NITI Aayog CEO BVR Subrahmanyam confirmed India’s new ranking and projected that if current policies and reforms continue, India could become the world’s third-largest economy within the next 2.5 to 3 years, overtaking Germany.
However, despite this impressive progress, the gap between India and the top economies like the United States, China, and Germany remains substantial. The US economy, for example, is projected to be nearly seven times larger than India’s in 2025.
India’s Per Capita Income: The Next Frontier
India’s per capita income has doubled over the last decade, rising from $1,438 in 2013-14 to an estimated $2,880 in 2025, reflecting a broader impact of economic growth on individual prosperity. Yet, Anand Mahindra and economic experts agree that boosting per capita GDP is essential to ensure that the benefits of growth reach all citizens and translate into improved quality of life.
Conclusion: A Proud Moment with a Vision for the Future
India’s ascent to the fourth-largest economy is a moment of immense pride for the nation, symbolizing decades of hard work, reforms, and resilience. As Anand Mahindra aptly puts it, this achievement is “no small feat,” but it should serve as motivation to push further, focusing on inclusive growth and raising the standard of living for every Indian.
The journey ahead demands continued reforms, innovation, and a collective effort to sustain India’s rise on the global economic stage.