Indian economy (AI image)

India is the world’s fastest growing major economy – a feat it has consistently achieved for some time now. Based on the new GDP series, India’s economy grew at 7.8% in the third quarter of the current financial year, a marginal slowdown from 8.2% in the previous quarter, but above consensus estimates of economists.Chief Economic Advisor V. Anantha Nageswaran has expressed confidence of above 7% GDP growth potential of the economy. India is on path to become the world’s third largest economy by the end of this decade – third only to the US and China.At present, according to International Monetary Fund (IMF) estimates from October 2025, India is the world’s fifth largest economy.

When will India become the 4th largest economy?

India was slated to overtake Japan to become the 4th largest economy by the end of this fiscal year, but for now it seems that a depreciating rupee has changed that.Asked about when India will become the fourth largest, CEA Nageswaran said, “In FY 2026-27, based on current indications, our projection is for nominal GDP (growth) to be around 11%. It (economy) will cross the $4 trillion mark comfortably in 2026-27. The relative ranking will also depend on other countries’ growth rates and exchange rates as well.”

“We are on course to becoming the top three or the top four largest economies in the world. There is no doubt about that. It will happen in the course of the next few years. Our growth rate post covid has been probably one of the best if not the best in the world, especially among G20 economies,” Nageswaran said.Also Read | India’s GDP grows at 7.8% in Q3 FY 2025-26: Top highlights from first data under new seriesHowever, he clarified that whether a particular relative position is reached or not will also depend on many other factors, like the exchange rate.“In India’s case, the exchange rate did not go in our favor in 2025-26. That will naturally have an impact. So the timing, given global uncertainty, given what happens to exchange rates, and the growth rates in other countries could be variable,” he added.