[Source / Observer Network, Xiong Chaoyi] "India has officially surpassed Japan to become the world's fourth largest economy." On May 25th local time, Indian media such as The Times of India and The Indian Express cited this statement from India's highest public policy think tank, the National Institution for Transforming India (NITI Aayog), and paid attention to the report.

At a press conference held on May 24th local time, NITI Aayog CEO B.V.R. Subrahmanyam stated that India's economy had grown to $4 trillion, ranking behind the United States, China, and Germany, and had surpassed Japan to become the world's fourth largest economy. He also cited data from the International Monetary Fund (IMF) at the scene to substantiate his claim.

"We are the fourth largest economy right now while I am speaking. We are a $4 trillion economy as I speak," he said, adding that the current geopolitical and economic environment was favorable for India. "Only the United States, China, and Germany have larger economies than India. If we continue with what we are planning and considering now, we will become the third largest economy within the next two and a half to three years."

However, just as India was celebrating this achievement, CNBC reminded that although India's nominal GDP has been very close to Japan's by 2024, according to IMF's current estimates, India is still slightly behind and is expected to surpass Japan this year.

Indian financial media Mint pointed out in an article that even though Subrahmanyam used IMF data to substantiate his claim, the fact is not so. According to the IMF's World Economic Outlook report released in April this year, India's GDP for the 2025 fiscal year is expected to reach $3.909 trillion, while Japan's GDP for the 2024 calendar year is expected to be $4.026 trillion. Therefore, India is currently still the world's fifth largest economy.

According to IMF predictions, India is expected to overtake Japan during the 2026 fiscal year, when its GDP will reach $4.187 trillion, slightly higher than Japan's 2025 calendar year GDP of $4.186 trillion. It should be noted that the IMF calculates India's GDP based on the fiscal year (April to March of the following year), while some countries like Japan follow the calendar year.

This means that, in the IMF's statistical system, India's 2024-25 fiscal year (April 2024 to March 2025) is marked as "2024", while the Indian government officially refers to it as the "2025 fiscal year". According to the IMF's labeling, India's GDP is expected to first surpass Japan in "2025" - which may lead outsiders to mistakenly believe that India has already achieved the feat, but in reality, this historic leap is likely to only be completed after the end of the 2025-26 fiscal year (March 2026).

According to IMF predictions, India is actually still the world's fifth largest economy, and overtaking Japan may happen until the 2026 fiscal year. As early as last April, an IMF estimate showed that India's nominal GDP might surpass Japan in 2025 to become the world's fourth largest economy, a year earlier than previously predicted.

In April this year, the IMF stated in its World Economic Outlook report that it expects India to become the world's fourth largest economy by 2025 (2026 fiscal year), with a nominal GDP reaching approximately $4.19 trillion, slightly higher than Japan's. The IMF also mentioned that India's per capita income has risen from $1,438 in the 2013-14 fiscal year to $2,880 in 2025, achieving a doubling growth.

The report points out that due to escalating trade tensions and increasing global uncertainties, India's economy is expected to grow by 6.2% in 2025-26, lower than the previous estimate of 6.5%.

"With support from private consumption (especially in rural areas), India's growth prospects for 2025 remain relatively stable at 6.2%," the report states. Global economic growth is expected to be 2.8% in 2025, 0.5 percentage points lower than previous estimates. Global economic growth is expected to reach 3% by 2026.

NITI Aayog CEO Subrahmanyam video screenshot

On August 15, 2023, Indian Prime Minister Modi assured the Indian people during the Independence Day celebration and speech that India would face "unprecedented economic development" in the next five years, becoming the world's third largest economy after the United States and China.

Last April 14th, Prime Minister Modi, who belongs to the Bharatiya Janata Party (BJP), unveiled a campaign manifesto titled "Modi's Promise" at the party's headquarters in New Delhi. At the manifesto launch event, Modi proposed a vision to make the country a developed nation by 2047. He also promised increased social spending, infrastructure development, and transforming India into a global manufacturing hub.

According to The Indian Express, the strategic document "Vision for a Developed India in 2047" published by NITI Aayog mentions that India has risen from being part of the so-called "fragile five" economies to become one of the top five global economies, achieving this leap in just ten years.

According to World Bank standards, a high-income country has an annual per capita income exceeding $14,005 (2024-25 fiscal year). This document proposes that India has the potential to become a high-income country by 2047, at which time it will be an economy worth $30 trillion.

According to RT, Subrahmanyam mentioned that the Indian government is preparing a new round of asset monetization plan, which will be announced in August this year, consistent with the view of India's Finance Minister Nirmala Sitharaman. In a statement sent to the IMF in April this year, Sitharaman believed that "specific structural reforms and domestic resource mobilization are essential for achieving economic stability and development goals."

It was reported that India is also negotiating tariff issues with major economies such as the United States and Europe. Indian regulators have been working hard for economic growth, including cutting the benchmark interest rate for the second time this year in April by the Reserve Bank of India.

Analysts pointed out that although India's economy continues to grow, the current growth rate has significantly slowed compared to last year's 9.2%. Anand Mahindra, chairman of Mahindra Group, emphasized on social platform X: "While celebrating achievements, we must remain sober-minded." He added that India's next leap should focus on improving per capita GDP, rather than just being satisfied with surpassing Germany in total GDP.

This article is an exclusive article of the Observer Network and cannot be reprinted without authorization.

Original source: https://www.toutiao.com/article/7508965852079768100/

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