India Becomes the 4th Largest Economy as Declared by NITI Aayog
India has officially become the world’s fourth-largest economy, surpassing Japan. NITI Aayog CEO B V R Subrahmanyam made this historic announcement on May 24, 2025, during a press briefing after the 10th Governing Council meeting of NITI Aayog.
Subrahmanyam credited this milestone to the favourable geopolitical and economic environment currently supporting India’s rapid rise.
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India’s Economic Leap: From $3 Trillion to $4 Trillion
With a nominal GDP now at $4 trillion, India overtakes Japan to secure the 4th spot globally, trailing only the United States, China, and Germany. Subrahmanyam mentioned, based on IMF data, that India might emerge as the 3rd largest economy in the world within the next 2.5 to 3 years.
Key Factors Driving the Growth
- Strategic Reforms: Production-Linked Incentive (PLI) schemes and 'Make in India' initiatives boosted manufacturing and exports.
- Digital Transformation: Widespread digital adoption enhanced financial inclusion and business efficiency.
- Infrastructure Development: Massive investments in roads, ports, and airports fueled economic activity.
- Demographic Dividend: A young, dynamic workforce supporting innovation and consumption growth.
NITI Aayog’s Role in Economic Planning
NITI Aayog, established in 2015, acts as India’s apex policy think tank, replacing the Planning Commission. It plays a vital role in policy formulation and fostering cooperative federalism by engaging with state governments.
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Global Implications of India’s Rise
- Attracting More Foreign Direct Investment (FDI)
- Enhanced Global Influence in forums like G20 and WTO
- Wider Trade and Partnership Opportunities
Recommended Reads on India’s Economic Journey
- India’s Long Road: The Search for Prosperity by Vijay Joshi
- India Unbound by Gurcharan Das
- From Poverty to Prosperity by Niranjan Rajadhyaksha
- Economic Growth And Its Distribution In India
- Reset: Regaining India’s Economic Legacy
Final Word
India’s milestone achievement of becoming the world’s 4th largest economy highlights its growing economic strength and global influence. With sustained reforms, digital innovation, and infrastructure development, India is poised to climb even higher in the years ahead.
Stay tuned for more such updates on India’s growth story!
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