New Delhi: India has now become the world’s fourth largest economy, leapfrogging Japan and behind the US, China and Germany with its GDP reaching $4.18 trillion. According to a press note released by the government, India’s GDP expanded by 8.2 per cent in the second quarter of FY2025-26, marking a six-quarter high.
Despite the challenges with the unreasonable 50% tariffs put forth by the Trump administration, India’s exports have managed to grow reasonably, despite the slowing global demand.
India has also seen a boost in domestic consumption, partly credited to the GST 2.0 reforms post Diwali and the once-in-a-decade deflation witnessed in the second half of 2025 credited to stable food prices.
In a LinkedIn post, PM Modi highlighted the structural reforms implemented during the year, including the labour reforms, enactment of forward-thinking export laws, insurance laws and the lowering of the income taxes announced during the budget session.
Though this is a step in the right direction, especially for India’s Viksit Bharat goal, the growth in GDP hasn’t meant much for its population, which has already become the world’s largest, overtaking China in 2023, as the benefits of this growth have yet to percolate to the most disadvantaged of society.
According to the World Bank, India’s GDP per capita is at $2,694 in 2024, roughly 20 times below Germany’s $56,103 or 12 times below Japan’s $32,487. India still has a long way to go to reach the middle-income status, while enhancing the standard of living for all its citizens.
Moving ahead, the government is looking forward to implementing its next series of reforms to boost consumption and growth, most of which is expected to be announced during the forthcoming budget in February.
