India Falls to Sixth-Largest Economy in 2025, Projected to Become Third-Biggest by 2031

India Slips to Sixth-largest Economy in 2025, but Expected to Regain Momentum

The International Monetary Fund (IMF) has released its latest data, showing India slipping to become the world's sixth-largest economy in 2025, a drop of one rank from the previous year. Despite posting one of the fastest growth rates among major economies, India's economy is estimated at $3.92 trillion in 2025, placing it behind the UK ($4 trillion) and Japan ($4.44 trillion).

India's nominal growth in rupee terms during the year was around 9 percent, however, a stronger dollar and downward revisions to GDP under the new series reduced the pace of India's rise in dollar-denominated GDP terms. The drop in ranking comes largely due to global economic rankings being measured in dollars, with currency depreciation weighing heavily on India's position. IMF projections show the rupee weakening from around 84.6 per dollar in 2024 to 88.5 in 2025, with further depreciation expected over the medium term.

India's Economic Growth Outlook

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India is expected to remain the sixth-largest economy in 2026 as well, but is projected to regain momentum thereafter. By 2027, India is forecast to overtake the UK and return to being the fourth-largest economy, with GDP rising to $4.58 trillion, compared with Britain's projected $4.47 trillion. India is then expected to surpass Japan in 2028, when its economy is projected at $5.06 trillion, compared with Japan's $4.74 trillion, making India the world's third-largest economy in nominal terms.

However, under the revised IMF trajectory provided, India appears to move decisively into third position only by 2031, when GDP is projected at $6.79 trillion, well above Japan's $5.13 trillion. Despite the ranking shift, India remains the fastest-growing major economy and one of the few large countries expected to consistently expand above 6 percent over the medium term.

India's Economic Growth Projections

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By 2030, India's economy is projected to reach $6.17 trillion, narrowing the gap with Germany before moving firmly into the global top three thereafter.