"No Small Achievement": Anand Mahindra As India Becomes 4th Largest Economy

By Admin

26 May, 2025

India has achieved a significant economic milestone by becoming the fourth-largest economy in the world, overtaking Japan, as confirmed by NITI Aayog CEO BVR Subrahmanyam last week. With a projected Gross Domestic Product (GDP) of $4.187 trillion for the financial year 2025-26, India now stands behind only the United States, China, and Germany.

This remarkable leap is not just about numbers; it reflects decades of determination, policy shifts, and the collective effort of over a billion people striving for a better future. Industrialist Anand Mahindra, known for his forward-thinking leadership, hailed this achievement as a “dream come true” and a defining moment in India’s journey.

“When I was in business school, the idea of India overtaking Japan in GDP felt like a distant, almost audacious dream,” said Mahindra. “Today, that milestone is no longer theoretical.”

The Power of Growth

GDP, or Gross Domestic Product, is the total value of all goods and services produced by a country in a year. It’s a major indicator of a nation’s economic strength. Until 2024, India held the fifth spot globally. Now, according to the IMF’s April World Economic Outlook, India’s GDP is projected to reach $4.19 trillion, slightly ahead of Japan’s estimate.

Japan, long seen as a global economic powerhouse with legendary productivity and innovation, was overtaken—a testament to India’s ambition and entrepreneurial spirit. As Mahindra noted, “That we’ve caught up is a testament to the ambition and ingenuity of millions of Indians across sectors, generations, and geographies.”

A Call to Stay Hungry

Despite the celebration, Mahindra urged the country not to become complacent. “India’s next leap must be in per capita GDP, not just overtaking Germany,” he said.

Per capita income—the average income earned per person in a country—is a crucial measure of economic well-being. While India's GDP is rising, its per capita income remains lower compared to developed nations. However, the growth is evident: from $1,438 in 2013-14 to a projected $2,880 in 2025, showcasing a significant improvement in the average Indian’s earning potential.

Reforms Will Power the Future

To continue this upward journey, Mahindra emphasized the importance of sustained economic reforms—particularly in areas such as governance, infrastructure, manufacturing, education, and access to capital. These reforms are essential for ensuring that the benefits of economic growth reach all segments of society.

As per NITI Aayog’s Subrahmanyam, if India maintains its current policy trajectory, the country could become the third-largest economy within the next 2.5 to 3 years.

The Road Ahead

While this achievement marks a proud moment, the gap with the top economies is still substantial. The United States is projected to have a GDP of $30.5 trillion in 2025, nearly seven times India’s size. China, in second place, is estimated to reach $19.2 trillion, while Germany just slightly edges out India to hold third position.

According to the IMF, India is expected to grow at 6.2% in 2025-26, a slight decrease from the previous estimate of 6.5%, due to global trade uncertainties.

Conclusion

India’s rise to the fourth-largest economy is no small achievement—it is a reflection of relentless progress, economic resilience, and the dreams of a billion people. Yet, as Anand Mahindra wisely reminds us, the journey has just begun. The focus must now shift to increasing individual prosperity, strengthening institutions, and creating opportunities that are both inclusive and sustainable.

As the world watches India’s ascent, one thing is clear—the Indian growth story is far from over.