New Delhi, May 26, 2025 – India has surpassed Japan to become the world’s fourth-largest economy, with a nominal GDP of $4,187.017 billion in 2025, according to the International Monetary Fund’s (IMF) latest World Economic Outlook report. This historic milestone, announced by NITI Aayog CEO B.V.R. Subrahmanyam, underscores India’s position as the fastest-growing major economy. However, low per capita income continues to spark debate, with critics arguing that India’s economic rise must translate into tangible improvements for its 1.4 billion citizens.
A Meteoric Rise in Global Rankings
At a press conference following the 10th NITI Aayog Governing Council Meeting, Subrahmanyam celebrated India’s achievement. “We are a $4 trillion economy, and this is IMF data. India today is larger than Japan,” he declared, noting that only the United States ($30,507.217 billion), China ($19,231.705 billion), and Germany ($4,744.783 billion) rank higher. He projected that India could overtake Germany to become the third-largest economy within 2.5 to 3 years, reaching a GDP of $5,584.476 billion by 2028.
India’s growth, projected to exceed 6% annually through 2026, outpaces all major economies. In contrast, Germany faces zero growth in 2025 and 0.9% in 2026, while Japan’s economy is expected to stagnate at 0.6% for both years. The United States, the global leader, is forecast to grow at 1.8% in 2025 and 1.7% in 2026. India’s rise reflects sustained reforms, infrastructure investments, and a booming digital economy, with foreign direct investment (FDI) inflows reaching $70.9 billion in 2023-24, per the Reserve Bank of India (RBI).
Top 10 Economies in 2025: GDP, Per Capita Income, and Key Sectors
The IMF’s 2025 rankings of the world’s largest economies by nominal GDP, along with estimated per capita GDP and the top three GDP-contributing sectors (based on World Bank, national statistics, and industry reports), are as follows:
- United States
- GDP: $30,507.217 billion
- Per Capita GDP: ~$85,000
- Top Sectors: Services (77%, led by finance, healthcare, and technology), Industry (18%, including manufacturing and energy), Agriculture (1%)
- China
- GDP: $19,231.705 billion
- Per Capita GDP: ~$13,500
- Top Sectors: Industry (39%, led by manufacturing and construction), Services (54%, including e-commerce and finance), Agriculture (7%)
- Germany
- GDP: $4,744.783 billion
- Per Capita GDP: ~$55,000
- Top Sectors: Services (70%, including finance and logistics), Industry (29%, led by automotive and machinery), Agriculture (1%)
- India
- GDP: $4,187.017 billion
- Per Capita GDP: ~$2,900
- Top Sectors: Services (55%, led by IT, telecommunications, and finance), Industry (26%, including manufacturing and construction), Agriculture (18%)
- Japan
- GDP: $4,186.431 billion
- Per Capita GDP: ~$32,000
- Top Sectors: Services (70%, including retail and finance), Industry (29%, led by electronics and automotive), Agriculture (1%)
- United Kingdom
- GDP: $3,839.007 billion
- Per Capita GDP: ~$54,000
- Top Sectors: Services (80%, led by finance, professional services, and healthcare), Industry (19%, including manufacturing and energy), Agriculture (1%)
- France
- GDP: $3,211.356 billion
- Per Capita GDP: ~$47,000
- Top Sectors: Services (79%, including tourism and finance), Industry (19%, led by aerospace and pharmaceuticals), Agriculture (2%)
- Italy
- GDP: $2,422.077 billion
- Per Capita GDP: ~$39,000
- Top Sectors: Services (74%, including tourism and retail), Industry (24%, led by fashion and machinery), Agriculture (2%)
- Canada
- GDP: $2,225.672 billion
- Per Capita GDP: ~$52,000
- Top Sectors: Services (78%, including finance and real estate), Industry (20%, led by energy and mining), Agriculture (2%)
- Brazil
- GDP: $2,125.612 billion
- Per Capita GDP: ~$10,000
- Top Sectors: Services (63%, including finance and retail), Industry (20%, led by manufacturing and energy), Agriculture (17%)
Note: Per capita GDP figures are approximate, based on IMF and World Bank estimates for 2025. Sector contributions are derived from the latest available data (World Bank, national statistics) and may vary slightly by year.
Global Context: Contrasting Economic Trajectories
India’s robust growth stands out in a mixed global economic landscape. The Euro Area is projected to grow at 0.8% in 2025, with France at 0.6% and Spain at 2.5%. The United Kingdom is expected to see 1.1% growth in 2025 and 1.4% in 2026. Emerging markets like Brazil are also advancing, with a GDP of $2,125.612 billion in 2025. India’s resilience amid global challenges—such as inflation, supply chain disruptions, and geopolitical tensions—has been bolstered by initiatives like “Make in India” and the Production-Linked Incentive (PLI) scheme, which have driven sectors like electronics manufacturing (mobile phone exports hit $11 billion in 2023-24, per the Ministry of Commerce).
The Per Capita Income Dilemma
India’s per capita GDP of ~$2,900 starkly contrasts with higher-income economies like Japan ($32,000), Germany ($55,000), and the United States ($85,000). Social media platforms like X are abuzz with comments like, “India’s $4T economy is a milestone, but per capita income shows we’re far from true prosperity.” Critics argue that India’s large population dilutes its GDP, limiting improvements in living standards.
Dr. Arvind Panagariya, former NITI Aayog Vice Chairman, emphasized, “Per capita income is the real measure of economic well-being. India must prioritize job creation and skills to close the gap.” The IMF projects that India’s per capita GDP will trail other top economies for years, with China at $13,500 and Brazil at $10,000 by 2025. Addressing this requires boosting labor-intensive industries, improving education, and increasing female labor force participation (currently 23%, per the Asian Development Bank).
Sectoral Strengths Driving Growth
India’s economy is powered by its diverse sectors. The services sector, contributing 55% to GDP, is led by IT (India’s IT exports reached $194 billion in 2023-24, per NASSCOM), telecommunications, and finance. Industry (26%) includes manufacturing and construction, with initiatives like PLI boosting electronics and pharmaceuticals. Agriculture, at 18%, remains a vital employer, though its GDP share is declining as services and industry grow.
Other top economies rely heavily on services, with the U.S. (77%) and UK (80%) leading in finance and technology. China’s industrial strength (39%) drives its manufacturing dominance, while Germany’s automotive and machinery sectors anchor its industry (29%). Brazil’s agriculture (17%) and Japan’s electronics industry highlight their unique economic profiles.
Public Sentiment and Social Media
India’s economic ascent has sparked pride and debate on X. Hashtags like #IndiaRising trend alongside posts celebrating the $4 trillion milestone. However, many users stress the need for inclusive growth, with one post reading, “Fourth-largest economy sounds great, but $2,900 per capita? We need jobs, healthcare, education.” This reflects a public demand for policies that translate GDP growth into higher living standards.
The Path Forward
India’s trajectory to becoming the third-largest economy by 2028 hinges on sustaining growth while tackling challenges like unemployment (4.7% in 2024, per the International Labour Organization), regional disparities, and environmental sustainability. Policies to boost per capita income—such as vocational training, healthcare access, and labor market reforms—will be critical. The Asian Development Bank suggests that raising female workforce participation to global averages could add billions to India’s GDP.
India’s rise is a testament to its ambition and resilience. As Subrahmanyam noted, “India is on the move.” With strategic focus, India can not only climb economic rankings but also ensure its growth lifts all citizens, redefining what it means to be an economic powerhouse.
