Datanomics: India closes in on Japan for fourth-largest economy tag

The Indian economy has come closer to Japan. The latter stood at $4 trn in 2024. It is quite possible that India's economy may overtake Japan's next year as latter's economy is struggling to grow

India’s gross domestic product (GDP) growth is officially estimated to decelerate to 6.5 per cent during FY25 against 9.2 per cent last year. 

Higher revised base effect notwithstanding, GDP growth during FY25 is a shade higher than 6.4 per cent, pegged by the first advance estimates. Meanwhile, the GDP growth was revised higher for FY24 by a full one percentage point. The size of India’s economy  was estimated higher at Rs 331 trillion for FY25 against the earlier estimate of Rs 324 trillion. If one assumes the rupee to depreciate by 2.25 per cent against the dollar, the same it did in FY25 over the previous year, India’s GDP would be $4.2 trillion the next year on the Budget assumption of growth. 

The Indian economy has come closer to Japan. The latter stood at $4 trillion in 2024. It is quite possible that India’s economy may overtake Japan’s next year as the latter’s economy is struggling to grow. 

As theIndian economy takes strides, it continues to be stuck in the lower range of the middle-income trap.