India Becomes World's 4th Largest Economy, Overtaking Japan

• India's nominal GDP is estimated at $4.18 trillion in 2026, surpassing Japan to become the world's fourth-largest economy.
• This marks a rapid ascent from 10th place in 2014 and 5th in 2022, driven by consistent growth and structural reforms like GST.
• Despite its large economic size, India's per-capita GDP remains low ($2,694), reflecting a large population and significant informal sector.
• Strong domestic demand, urban consumption, and government reforms have fueled growth, with projections suggesting India could overtake Germany by 2030.
• Challenges include generating high-quality jobs for its young workforce and navigating external pressures like trade tariffs and currency depreciation.

Why It Matters: India's economic scale is growing rapidly, but per-capita prosperity still lags behind advanced economies.