India’s GDP revisions mean it will take longer to overtake Japan

Pedestrians pass stores in New Delhi. Bloomberg

• India's revised GDP data delays surpassing Japan's economy
• India's GDP hits $4 trillion, still behind Japan's $4.4 trillion
• Currency changes and new base year lowered India's GDP estimate

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Major revisions to India’s gross domestic product data Friday showed it will take longer than expected to surpass Japan as the world’s fourth-largest economy.

The government published GDP using a new base year, estimating the size of the economy at Rs 345.47 lakh crore, in nominal terms, in the fiscal year ending in March. That was lower than Rs 357.14 lakh crore forecast under the previous data series.

Using an average exchange rate for the period, GDP is estimated at about $4 trillion for the fiscal year. Japan’s GDP reached $4.4 trillion in 2025.

“Based on the nominal GDP size under the new series, which is lower than expected and also lower than the last series, it is unlikely that India’s economic size will surpass Japan this year, or possibly even next year,” said Sakshi Gupta, an economist at HDFC Bank Ltd.

Prime Minister Narendra Modi and several senior government officials have already referred to India as the world’s fourth-largest economy. The International Monetary Fund had previously forecast that India would reach that milestone in the current fiscal year.

That’s now unlikely, partly because India’s currency depreciated nearly 5% against the dollar last year — reducing the value of GDP in dollar terms — while the yen strengthened.

Even so, the trajectory is clear, given India’s economy is expanding more than 7% and its mostly young population of 1.4 billion is growing. Japan’s economy, meanwhile is expected to grow 1% in the current fiscal year, and its population is shrinking.

Surpassing Japan would be more of a reflection of scale than prosperity for India. Per capita income in the country remains just above $3,000, a fraction of Japan’s $36,390, according to IMF estimates for 2026.