India slips to 6th-largest economy in 2025
What's the story
India has slipped to the sixth-largest economy in the world in 2025, according to the latest International Monetary Fund (IMF) data. The country's GDP is estimated at $3.92 trillion for 2025, putting it behind the UK ($4 trillion) and Japan ($4.44 trillion). Despite being one of the fastest-growing major economies with a nominal growth rate of around 9% in rupee terms, India has dropped one rank from its fifth position in 2024.
Currency effect
Rupee depreciation against dollar weighs on India's position
The fall in India's global economic ranking is mainly due to the depreciation of the Indian rupee against the US dollar. Since global GDP rankings are measured in dollars, currency depreciation has weighed heavily on India's position. IMF projections show that the rupee is likely to weaken from around 84.6 per dollar in 2024 to 88.5 in 2025, with further depreciation expected over the medium term.
Recovery forecast
India expected to regain 4th position by 2027
Despite the current setback, India is expected to regain its position as the world's fourth-largest economy by 2027. The country's GDP is projected to rise to $4.58 trillion, surpassing Britain's projected $4.47 trillion. Further, India is likely to overtake Japan in 2031 with an estimated GDP of $6.79 trillion against Japan's projected $5.13 trillion, making it the world's third-largest economy in nominal terms by then.
Growth trajectory
GDP growth in rupee terms
Despite the rupee's depreciation against the dollar, India's GDP in rupee terms is projected to rise from ₹318 trillion in 2024 to ₹346.5 trillion in 2025. This growth indicates strong domestic momentum and a resilient economy. However, economists warn that as long as the rupee remains under pressure against the dollar, India's ascent in global GDP rankings, measured in dollar terms, will be uneven.