Did India Really Overtake Japan's Economy? NITI Aayog Softens Stance on Bold Claim

Just days after NITI Aayog CEO BVR Subrahmanyam declared that India had overtaken Japan to become the world’s fourth-largest economy, NITI Aayog member Arvind Virmani offered a more measured and contrasting view on Monday, stating that India is on track to reach that milestone by the end of 2025.

"India is in the process of becoming the fourth largest economy, and I am personally confident that will happen by the end of 2025 because we need (data) of all 12 months GDP [gross domestic product] to say that, you know, to assert that. So to say till then, it remains a forecast," Virmani told PTI.

Notably, the International Monetary Fund (IMF), in its World Economic Outlook (WEO) report released in April, said that India is expected to be the fourth-largest economy in the world, with a GDP of $4.19trn in 2025, surpassing Japan. The report also noted that India's nominal GDP for 2025 (FY26) is expected to be $4.187trn marginally more than the GDP of Japan, which is estimated at $4.186trn. The IMF data also showed that India's per capita income has doubled from $1,438 in 2013-14 to $2,880 in 2025.

However, Subrahmanyam claimed last week that the size of the Indian economy today is larger than Japan, citing IMF data. "We are the fourth largest economy as I speak. We are a $4trn economy as I speak," he said. The NITI CEO also added that India is only behind US, China and Germany and in 2.5-3 years it will be the third largest economy.

"So this is a complicated question, and I really do not know what the words anybody has used. Perhaps there was some word which was missed or something," Virmani told the news agency on asked about Subrahmanyam's claim.

He also underlined that generally US dollar current prices used while discussing the size of economies publicly. Virmani further pointed out that economies are compared in terms of annual GDP.

"I would say that I am pretty confident that that will happen, but the exact data will probably not be available till January or February, because we are talking about the whole year," he reiterated.

[With inputs from PTI]