India has officially overtaken Japan to claim the fourth spot among the world's largest economies, with its GDP now standing at $4.18 trillion, according to a recent government announcement. This milestone places the country just behind the United States, China, and Germany, marking a significant leap fueled by strong domestic demand and an 8.2% real GDP growth in the July-September quarter of 2025-26 – the highest in six quarters.

Government officials and NITI Aayog have celebrated this as a "defining moment," supported by IMF data that highlights India's edge over Japan's roughly $4.1 trillion economy, which has been hampered by stagnation, an aging population, and currency challenges. Looking ahead, projections suggest India could push past Germany for third place in just 2.5 to 3 years, aiming for a $7.3 trillion GDP by 2030 through ongoing reforms in manufacturing, digital infrastructure, and leveraging its young workforce.

The growth story is powered by several key factors, including robust urban consumption, declining unemployment, inflation staying within the RBI's target, and thriving sectors like IT services that generate over $200 billion annually. Initiatives such as Production Linked Incentives (PLI) schemes have boosted manufacturing and exports, while softer global oil prices have eased import costs and freed up capital for investments, helping India navigate global trade tensions effectively.

For perspective on the global pecking order, the top economies now line up with the US at around $28 trillion, China at $18 trillion, Germany at $4.5 trillion, India at $4.18 trillion, and Japan slipping to fifth at about $4.1 trillion. Though India's per capita income lags at roughly $2,700 compared to Japan's $32,000, this achievement signals a strong trajectory toward high middle-income status by 2047, provided focus remains on job creation and reducing inequality.