India slips to sixth-largest economy in 2025, now seen becoming third-biggest by 2031

NEW DELHI : India slipped to become the world’s sixth-largest economy in 2025, dropping one rank from the previous year, according to the latest International Monetary Fund data, even as the country continued to post one of the fastest growth rates among major economies.

The Indian economy is estimated at $3.92 trillion in 2025, placing it behind the UK ($4 trillion) and Japan ($4.44 trillion). US tops the list with a GDP of $30.8 trillion, followed by China at $19.6 trillion and Germany at $4.7 trillion.

India ($3.5 trillion) had ranked fifth in 2024, ahead of the UK at $3.4 trillion.

The drop in ranking comes despite India logging around 9 percent nominal growth in rupee terms during the year. However, a stronger dollar and downward revisions to GDP under the new series reduced the pace of India’s rise in dollar-denominated GDP terms.

Since global economic rankings are measured in dollars, currency depreciation has weighed heavily on India’s position. IMF projections show the rupee weakening from around 84.6 per dollar in 2024 to 88.5 in 2025, with further depreciation expected over the medium term.

Return to the fourth by 2027

India is expected to remain the sixth-largest economy in 2026 as well, but is projected to regain momentum thereafter.

By 2027, India is forecast to overtake the UK and return to being the fourth-largest economy, with GDP rising to $4.58 trillion, compared with Britain’s projected $4.47 trillion.

India is then expected to surpass Japan in 2028, when its economy is projected at $5.06 trillion, compared with Japan’s $4.74 trillion, making India the world’s third-largest economy in nominal terms.

However, under the revised IMF trajectory provided, India appears to move decisively into third position only by 2031, when GDP is projected at $6.79 trillion, well above Japan’s $5.13 trillion.

Why has the climb slowed

While India has maintained strong real growth, the rupee’s steady depreciation against the dollar has offset part of those gains.

IMF data shows India’s GDP in rupee terms rising from Rs 318 trillion in 2024 to Rs 346.5 trillion in 2025, but the gain in dollar terms is more modest because of currency weakness.

Still fastest among major economies

Despite the ranking shift, India remains the fastest-growing major economy and one of the few large countries expected to consistently expand above 6 percent over the medium term.

By 2030, India’s economy is projected to reach $6.17 trillion, narrowing the gap with Germany, before moving firmly into the global top three thereafter. US economy will retain the top spot with a size of $39 trillion, while Chinese economy will follow at $27.5 trillion.

Source : Moneycontrol