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India Overtakes Japan to Become the World’s Fourth-Largest Economy with $4.18 Trillion GDP, Government Says

India's GDP reached $4.18 trillion with 8.2% growth in Q2 2025-26, driven by private consumption and strong credit flows, surpassing Japan's economy size.

  • The Government of India announced on December 31, 2025 that India’s GDP is valued at USD 4.18 trillion, surpassing Japan to become the world’s fourth-largest economy and poised to displace Germany by 2030.
  • Financial conditions have stayed benign with strong credit flows to the commercial sector, while the government release noted inflation is below the lower tolerance threshold, unemployment is declining, and exports are improving.
  • India's real GDP rose 8.2 per cent in Q2 of 2025-26, up from 7.8 per cent in the first quarter and 7.4 per cent in the fourth quarter, marking a six‑quarter high.
  • The government said the rise highlights India's resilience amid trade uncertainties, linking momentum to structural reforms and its ambition for high middle-income status by 2047.
  • The IMF and OECD lifted medium‑term projections for India, with the IMF at 6.6 per cent for 2025 and 6.2 per cent for 2026, while S&P, ADB and Fitch raised near‑term forecasts.
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India TV News broke the news in India on Tuesday, December 30, 2025.
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