India is set to achieve a remarkable milestone, projected to become the world’s fourth-largest economy by the end of 2025, according to the International Monetary Fund’s (IMF) World Economic Outlook report released in April. This impressive ascent follows India’s leap past the United Kingdom to become the fifth-largest economy just a few years ago. Now, it’s on track to surpass Japan, solidifying its position among the global economic powerhouses. This rapid growth, from the 10th largest economy to the 4th in a mere 11 years, has astounded experts worldwide and highlights a significant shift in the global economic landscape. This trajectory underscores a period of sustained growth and strategic reforms, bolstering investor confidence and positioning India as a key player in the international arena.

While India’s overall economic growth is undeniably impressive, a deeper look reveals some underlying complexities, particularly concerning per capita income. Despite its impending status as the world’s fourth-largest economy, India’s per capita GDP remains remarkably low at $2,880, significantly trailing China ($13,690) and Japan ($33,960). This disparity is largely attributed to India’s vast population of 1.4 billion people, which dilutes the benefits of its GDP growth. Furthermore, challenges such as a large informal employment sector (approximately 90% of the workforce) and low female workforce participation (26% compared to the global average of 47%) continue to limit per capita gains. However, there’s a silver lining: per capita income has nearly doubled in the last decade, aligning with overall GDP growth as population growth slows and the fertility rate approaches the replacement rate of 2.2. Looking ahead, India aims to become a $5 trillion economy by 2027 and the third-largest globally by 2028, surpassing Germany, though experts emphasize the need for continued reforms to sustain this momentum.