India’s historic rise to the position of the world’s fourth-largest economy is not just a matter of national pride—it is a compelling testimony to the transformative power of policy, leadership, and resilience. Surpassing Japan, a long-time stalwart of the global economy, India’s nominal GDP now stands at $4.187 trillion, according to the latest IMF data. This milestone deserves not only to be acknowledged but celebrated. Much of the credit goes to the determined and reform-oriented leadership of Prime Minister Narendra Modi and his government.
India’s economic journey over the past decade has been one of strategic advancement. In 2014, India ranked 10th globally in terms of nominal GDP. Through focused initiatives such as Make in India, Digital India, a major infrastructure push, and massive public investment, the economy climbed steadily to the fifth position by 2020. Now, in 2025, India has moved to the fourth spot, overtaking Japan.
What makes this achievement even more remarkable is that it comes despite the long-overdue and still-pending administrative and bureaucratic reforms. India continues to be hamstrung by archaic procedures, excessive red tape, and institutional inertia in its governance structures. That the country has reached this milestone in the face of such systemic constraints highlights the dynamism of its private sector, the resilience of its people, and the commitment of policymakers who have worked around these obstacles.
If current trends continue, India is poised to become the third-largest economy within the next 2.5 to 3 years—overtaking Germany and placing itself just behind the United States and China.
Equally significant has been the strengthening of India’s fiscal base. In FY 2024–25, net direct tax collections surged to ₹11.83 lakh crore, registering a 17% increase over the previous year. Indirect taxes, too, have shown consistent growth, with an expected 8.3% rise in FY 2025–26. These figures indicate an expanding formal economy, improved compliance, and a robust tax administration system.
India’s foreign exchange reserves add further weight to this narrative. As of mid-May 2025, they stand at a formidable $685.72 billion—among the highest globally. This financial cushion ensures macroeconomic stability, guards against external shocks, and enhances India’s global creditworthiness.
The Achilles’ Heel: A Stagnant Agriculture Sector
Yet, amid this celebratory landscape, one sector continues to lag—agriculture. While services and industry are advancing rapidly, agriculture grew at a dismal 1.4% in FY 2023–24, down from 4.7% the previous year. This sector employs over 40% of India’s workforce and is now acting as a drag on the broader economy.
Agriculture remains dependent on monsoons, low-value crops, and outdated practices. Private investment is minimal, and market linkages remain underdeveloped. If India truly aspires to become a $5 trillion and eventually a $10 trillion economy, it cannot afford to neglect this foundational sector.
A bold, bipartisan push for agricultural reforms is the need of the hour—freeing up markets, incentivizing private investment in infrastructure, cold chains, and food processing. The goal must shift from merely ensuring food security to achieving farmer prosperity.
A Balanced Vision for the Future
India’s economic transformation is real, measurable, and commendable. The Modi government’s stewardship—especially in macroeconomic management, infrastructure development, and taxation reform—has laid the foundation for sustained growth.
But to build on this momentum, we must pivot from macroeconomic milestones to structural balance—where no sector, no state, and no community is left behind.
To celebrate this milestone is right. But to use it as a launchpad for deeper reforms—especially in agriculture, administration, and the judiciary—is imperative.