Major revisions to India's GDP data, published by the government on Friday, indicate it will take longer than expected for the country to surpass Japan as the world's fourth-largest economy. The new base year estimates put nominal GDP at 345.47 trillion rupees for the fiscal year ending March, lower than the previous series' forecast of 357.14 trillion rupees.
The Indian government has estimated nominal GDP at 345.47 trillion rupees for the fiscal year ending March 2026, using a new base year. This figure falls short of the 357.14 trillion rupees forecasted in the previous data series. Applying an average exchange rate, India's GDP comes to about $4 trillion, while Japan's reached $4.4 trillion in 2025.
"Based on the nominal GDP size under the new series, which is lower than expected and also lower than the last series, it is unlikely that India’s economic size will surpass Japan this year, or possibly even next year," said Sakshi Gupta, an economist at HDFC Bank.
Prime Minister Narendra Modi and several senior officials have already described India as the world's fourth-largest economy. The International Monetary Fund had projected that milestone for the current fiscal year, but that now appears unlikely. This shift stems partly from the rupee's nearly 5% depreciation against the dollar last year, which reduced GDP value in dollar terms, contrasted with the yen's strengthening.
Nevertheless, India's economy is expanding by more than 7%, supported by a growing population of 1.4 billion, mostly young people. In contrast, Japan's economy is projected to grow by 1% this fiscal year amid a shrinking population. Overtaking Japan would reflect India's scale rather than prosperity. According to IMF estimates for 2026, per capita income in India stands at just over $3,000, a fraction of Japan's $36,390.
