Datanomics: India may not surpass Japan as 4th-largest economy in FY26

India's economy is growing faster than peers, but a weakening rupee may delay its move past Japan to become the world's fourth-largest in dollar terms

The size of India’s economy is officially expected to be at ₹357.13 trillion, slightly higher than the ₹356.98 trillion assumed in the Budget for 2025-26 (FY26). However, the exchange rate of the rupee against the dollar may delay the economy’s rise to become the fourth-largest, unlike earlier expectations.

 

India still fastest-growing economy

 

While India has maintained its fastest-growing tag in FY26, China is a distant second in terms of economic growth. 

 

Fight for 4th place

 

In dollars, India’s GDP was projected at $4.09 trn in FY26, based on advance estimates. Japan’s reached $3.3 trn in the first nine months of 2025 and could have exceeded $4.3 trn in Q4. The IMF initially forecast India overtaking Japan in 2025, but later revised estimates to $4.12 trn for India (FY26) versus $4.28 trn for Japan. 

 

Peer comparison

 

The rupee depreciated the most versus the dollar among the currencies of top economies.