The IMF said in 2027 India is set to take its place, with a GDP reaching US$4.52 trillion.

India has shown strong growth in recent years despite global economic headwinds, with the IMF this week raising its forecasts for 2026 growth to hit 7.0 percent.

“India entered this with very strong fundamentals,” he said. “Growth was strong, fiscal prudence was pretty much enshrined, they had lots of reserves and so on. And so in that context, they have responded well to the shock.”

Amidst global economic disruptions, India has achieved strong economic growth in recent years. The IMF recently raised its economic growth forecast for India for 2026 to seven percent. In contrast, Japan's economic growth has slowed due to an aging population and structural issues.

While releasing the IMF's regional economic outlook for the Asia-Pacific region on Thursday, Asia Director Krishna Srinivasan stated that India is in a relatively strong position to cope with the impact of energy. He said that India's economic growth is strong, fiscal discipline is maintained, and there are sufficient foreign exchange reserves, making it easier to cope with the shock of energy prices.

India’s projected growth remains substantially higher than the IMF’s global economic growth estimates of 3.1% for 2026 and 3.4% for 2027.

The difference highlights India’s position as one of the fastest-growing major economies, supported by its large domestic market, services activity, investment and infrastructure development.

Domestic consumption remains an important component of India’s economic activity, while manufacturing, construction and technology-related services contribute to employment, production and investment.

The IMF’s revised assessment comes amid uncertainty surrounding international energy prices, geopolitical developments and global financial conditions. India’s projected growth performance reflects the importance of its domestic economic foundations in sustaining activity during a challenging international environment.