New Delhi, Dec 29 (NationPress) With a GDP of $4.18 trillion, India has overtaken Japan to become the world's fourth-largest economy. It is on track to surpass Germany and secure the third position within the next 2.5 to 3 years, with a projected GDP of $7.3 trillion by 2030, as stated in an official release.

The growth trajectory has exceeded expectations, with GDP reaching a six-quarter high in Q2 of 2025-26, showcasing India's resilience amidst ongoing global trade challenges.

Domestic factors, particularly strong private consumption, have played a pivotal role in this growth, according to the statement.

India's real GDP saw an increase of 8.2 percent in Q2 FY2025-26, up from 7.8 percent in the preceding quarter and 7.4 percent in Q4 of 2024-25. This growth was driven by robust domestic demand despite global trade and policy uncertainties. Real gross value added (GVA) also grew by 8.1 percent, bolstered by a thriving industrial and services sector.

High-frequency indicators suggest a consistent economic activity: inflation remains below the accepted threshold, unemployment is decreasing, and export performance is improving. Additionally, financial conditions remain favorable, with substantial credit flows to the commercial sector, and demand conditions are strong, further supported by urban consumption.

“India is among the world’s fastest-growing major economies and is well-positioned to maintain this momentum. The country aims to achieve high middle-income status by 2047—the centenary of its independence—by building on solid foundations of economic growth, structural reforms, and social progress,” the statement noted.

The Reserve Bank of India (RBI) has revised India's GDP growth forecast for FY 2025-26 upwards to 7.3 percent from an earlier estimate of 6.8 percent.

India's domestic growth trajectory is on the rise, driven by various factors including strong domestic demand, rationalization of income tax and goods and services tax (GST), declining crude oil prices, accelerated Government capital expenditure (CAPEX), and favorable monetary and financial conditions amid mild inflation.

Looking forward, domestic factors such as positive agricultural outlook, ongoing benefits from GST rationalization, low inflation, and strong corporate and financial institution balance sheets—coupled with supportive monetary policies—are expected to continue fostering economic activity.

External elements, including robust services exports, are anticipated to further bolster growth, while swift conclusion of trade and investment negotiations could provide additional opportunities. Ongoing reforms are likely to enhance growth prospects further. The current macroeconomic landscape presents a rare “goldilocks period” characterized by high growth and low inflation, as per the statement.