On December 29, 2025, the Indian government released its annual economic assessment report, announcing that its gross domestic product (GDP) had reached $4.18 trillion, officially surpassing Japan to become the world's fourth-largest economy. It also proposed that it is expected to overtake Germany within two to three years and rank as the third-largest economy globally, with GDP projected to rise to $7.3 trillion by 2030. This news, reported by India's Economic Times, has attracted widespread attention from the international community. However, Indian media clearly stated that the official final confirmation of this ranking still needs to wait for the complete GDP calculation data published in 2026.
The Indian government announced that the GDP in 2025 reached $4.18 trillion, surpassing Japan to become the world's fourth-largest economy, and plans to overtake Germany within the next three years. However, this conclusion has sparked extensive discussions due to differences in statistical methods and the lack of synchronization of international institution data.
The supporting basis for this data includes demographic dividend (1.4 billion population, median age 28), advantages of the IT service industry (accounting for 60% of GDP), and foreign investment industrial chain transfer (such as Apple and Tesla setting up factories).
International institutions do not fully recognize India's economic data. The IMF predicts that Japan's GDP in 2025 ($4.3 trillion) will still be higher than the Japanese data cited by India ($4.02 trillion). Substantive surpassing requires waiting for the final calculation in 2026. India's data equals surpassing Japan one year earlier.
Structural contradictions under the spotlight that are difficult to resolve in the short term:
Economic quality shortcomings
Industrial imbalance: manufacturing's global export share is less than 2%, and 70% of industrial products depend on imports (some sectors rely on Chinese intermediate goods); high-end manufacturing is weak, such as the performance of domestically produced fighter jets lags behind imported "Rafale."
Living conditions: 800 million people live below the poverty line, railway efficiency is one-third of China's, and a 37% illiteracy rate is the highest globally.
Risk of foreign investment withdrawal: net foreign investment outflow was $72.3 billion between 2022 and 2024, and policy fluctuations (such as seizing Chinese company investments) have increased uncertainty.
Additionally, the youth unemployment rate is rumored to be as high as 42.8% (officially denied), and female labor participation rate is less than 25%, with caste system restricting labor mobility.
Government corruption, lagging infrastructure (electricity costs are 30% higher than China's) hinders the goal of industrial upgrading.
These are development shortcomings, which are difficult to overcome in the short term.
Although there are many developmental bottlenecks, it is inevitable for India to enter the top three economies in the world soon, after all, they are the world's largest population country. The demographic dividend is an important support for its economic scale. However, don't mention per capita.
Original article: toutiao.com/article/1853070771917836/
Statement: This article represents the views of the author only.