INDIA OVERTAKES JAPAN TO BECOME 4TH LARGEST ECONOMY

NEWS – India surpassed Japan to become the world’s 4th largest economy in 2025 despite global headwinds and US tariffs.

HIGHLIGHTS

GDP Growth Performance (2025)

• GDP grew 7.4% in Jan–Mar 2025
• 7.8% growth in Apr–Jun quarter
• 8.2% growth in Jul–Sep quarter
• Average growth (H1 FY 2025–26): 8%
• Beat most projections despite US imposing 50% tariffs on Indian goods

Inflation Trend

• Inflation declined from 4.26% (Jan 2025)
• Fell sharply to 0.71% (Nov 2025)
• Lower inflation boosted household spending & economic confidence

Growth Outlook (2025–26)

• Expected GDP growth range: 6.3%–6.8%
• Analysts expect mild slowdown in second half of FY due to:
  • Global slowdown
  • Trade challenges
  • Demand normalization

2026 & Beyond — Institutional Projections

• World Bank: 6.5% (2026)
• IMF: 6.2%
• OECD: 6.2%
• ADB: Raised forecast to 7.2%
• S&P: 6.7%
• Fitch: 7.4%

 Why Growth Sustained?

• Strong tax revenues
• Policy support & liquidity measures
• Reduced household inflation burden
• Better monsoon aiding demand