India Ascends to Fourth Largest Global Economy following Policy Adjustments
India Achieves Economic Boost: Fourth Largest Economy in the World
In 2014, India's economy was the 11th largest globally, with a size of 2.04 trillion US dollars. Fast forward to 2025, India is projected to rank fourth in terms of economy size, surpassing Japan's and only trailing the United States, China, and Germany. This significant rise in economic stature is due to a twofold increase in the country's nominal GDP, as per the International Monetary Fund's World Economic Outlook (2025) data.
India's economic advancement can be attributed to key sectors and factors:
- Manufacturing Sector: The manufacturing sector has witnessed substantial growth in India, contributing to the overall economic expansion. Government initiatives like "Make in India" have spurred both domestic and foreign investment, leading to increased industrial production.
- Digitalization: India's economy has gained momentum through improved digitalization and a flourishing IT sector. It has generated employment opportunities, boosted export earnings, and fostered economic growth.
- Service Sector: Traditionally, the service sector, encompassing IT, financial services, and tourism, has been a significant contributor to India's GDP. Its vital role remains unchanged in the country's economic growth.
Several factors have fueled the growth in India's economy:
- Economic Reforms: Initiatives such as the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code have facilitated business streamlining and improved the ease of doing business in India. These reforms have been instrumental in attracting foreign investment and spurring economic growth.
- Geopolitical Positioning: India's advantageous geopolitical location and status have bolstered its resilience in navigating global economic challenges effectively. It has gained favor as a desirable destination for foreign investment, thanks to its large market and skilled workforce.
- Demographic Advantage: India's vast, young population and substantial workforce have played a crucial role in driving economic growth. The country's demographic dividend bolsters its labor force, boosting productivity and output.
- Infrastructure Development: Investments in infrastructure, including transportation, energy, and communication, have contributed to economic growth by improving connectivity and slashing transaction costs.
By 2025, India is expected to have a nominal GDP of approximately $4 trillion, with a growth rate of 6.2%. As one of the fastest-growing major economies globally, India continues to cement its position.
References:1. IMF World Economic Outlook (2025).2. World Bank National Accounts Data.3. Goods and Services Tax (GST) introduced in 2017.4. Indian economy characterized by growth in IT, tourism, and financial services.
In the coming years, the rise in India's economy, projected to reach a nominal GDP of approximately $4 trillion by 2025, will lead to increased interest in its financial market, fall under the purview of general news, and become a subject of discussion in policy-and-legislation and politics. The growth is fueled by various factors, including the manufacturing sector's expansion, digitalization, and the continuing significant role of the service sector (IT, financial services, and tourism), as well as economic reforms like the introduction of GST, geopolitical positioning, demographic advantage, and infrastructure development.
