India has surged past Japan to become the fourth largest economy in the world. This monumental announcement came from BVR Subrahmanyam, the CEO of NITI Aayog, following the 10th meeting of the Governing Council. He stated, 'The global economic environment is favorable for India, and as I speak, we are the fourth largest economy in the world, having achieved a milestone of a 4 trillion dollar economy.'
Only Three Nations Ahead of India
In a briefing after the NITI Aayog meeting, CEO BVR Subrahmanyam referenced International Monetary Fund (IMF) data, emphasizing that India has now surpassed Japan. India has made history by achieving this and is now only behind the economies of the United States, China, and Germany. Subrahmanyam further predicted that by maintaining their current strategic plan, India could surpass Germany to become the third largest economy in the next two and a half to three years.
Tariffs Couldn’t Halt the Growth
India attained its status as the world's fourth largest economy amidst global unrest caused by US tariffs. However, even the tariffs imposed by U.S. President Donald Trump failed to impede India's growth, which also remained unaffected by tensions with Pakistan. For a long time, India has been one of the fastest-growing economies, and it has now left the Japanese economy behind.
CEO's Remarks on Tariffs and Apple iPhone
When questioned about recent statements by U.S. President Donald Trump, the CEO expressed optimism that Apple iPhones sold in America would be manufactured there instead of in India or elsewhere. He added that the future of tariffs remains uncertain, highlighting India's competitive edge as a cost-effective production location. According to Subrahmanyam, the second phase of the asset monetization pipeline is underway, with an announcement likely in August.
An Economy Racing Ahead
The Indian economy has garnered recognition from entities like the World Bank and IMF, with many reports indicating that India’s GDP growth rate will continue to lead globally. Cairage Ratings recently forecasted that India’s GDP growth rate would be 6.8% in the fourth quarter, projecting an overall growth rate of 6.3% for the fiscal year 2025. Notably, growth is being propelled by strong performances in agriculture, hospitality, transportation, and manufacturing sectors.
Japan’s Economy Struggles Amid Tariffs and Inflation
While India claims the accolade of being the world's fourth largest economy, Japan's economy faces hurdles. Continuous tariff impacts compounded by rising inflation have subjected Japan to economic challenges. Reports highlight that inflation in Japan reached an unexpected high of 3.5% in April, exceeding market forecasts.
