Daijiworld Media Network – New Delhi

New Delhi, Apr 17: India’s ambition to become the world’s third-largest economy has faced a temporary setback. According to the latest data released by the International Monetary Fund (IMF), India has slipped to the sixth position in the 2025 global GDP rankings, primarily due to a weakening rupee against a strengthening US dollar.

Despite the drop in ranking, India remains the fastest-growing major economy in the world.

The global landscape

The IMF estimates India’s economy at $3.92 trillion in 2025, placing it just behind the United Kingdom, which stands at $4 trillion. Japan retains the fourth position with a GDP of $4.44 trillion.

The United States continues to lead the global rankings with a massive GDP of $30.8 trillion, followed by China at $19.6 trillion and Germany at $4.7 trillion. In 2024, India held the fifth spot with a GDP of $3.5 trillion, then ahead of the UK’s $3.4 trillion.

Currency impact

The decline in ranking is largely a "valuation effect" rather than a slowdown in domestic productivity. Since global economic comparisons are measured in US dollars, the Indian rupee's depreciation has eroded the nominal value of India's GDP in international terms.

The rupee has faced sustained pressure due to high US interest rates and global macroeconomic uncertainties, which have increased the demand for the dollar as a safe-haven currency.

Projected recovery

IMF projections suggest that India’s slide is temporary. The country is expected to reclaim the fourth position by 2027, overtaking the UK with a projected GDP of $4.58 trillion against the UK’s $4.47 trillion.

Under the revised trajectory, India is now expected to secure the third-place spot by 2031. By then, India’s GDP is projected to reach $6.79 trillion, significantly surpassing Japan’s projected $5.13 trillion.