With India officially becoming the fourth-largest economy, overtaking Japan in terms of Gross Domestic Product (GDP), Mahindra Group Chairman, Anand Mahindra, celebrated this historic milestone reached by the country, but with a sober reminder: Yes, it is a moment to celebrate but it is also time to introspect.

Taking to the social media platform, X (formerly known as Twitter), Anand Mahindra reflected on the shift, but with a tinge of nostalgia and foresight. “When I was in business school, the idea of India overtaking Japan in GDP felt like a distant, almost audacious dream,” he wrote. “Today, that milestone is no longer theoretical; we’ve become the world’s fourth-largest economy.”

The Indian economy, driven by robust domestic consumption, infrastructure investment, and a growing services sector, recently edged past Japan in nominal GDP.

On May 25, in a press conference, NITI Aayog CEO, BVR Subrahmanyam announced that due to favourable economic conditions and riding on robust year-on-year GDP growth, India has surpassed Japan in terms of GDP, thereby becoming the fourth-largest economy in the world.

“It is only the US, China, and Germany which are larger than India, and if we stick to what is being planned and what is being thought through, in 2.5- 3 years, we will be the third largest economy,” he said, citing IMF data.

As per the International Monetary Fund’s April edition of the World Economic Outlook report, India is well on its way to become the world’s fourth-largest economy, edging past Japan in the process. As per IMF’s projections, India’s nominal GDP is set to reach $4.19 trillion, which is marginally ahead of Japan’s estimated $4.18 trillion.

In many ways, as per economists, this milestone marks a significant shift in the global economic order. It also highlights India’s developmental trajectory undertaken over the past decade and more. IMF data also revealed that India’s per capita income has more than doubled: from $1,438 in 2013-14 to an estimated $2,880 in 2025, highlighting the broader impact of economic expansion on individual prosperity.

However, the IMF has revised India’s projected growth rate for FY26 to 6.2%, slightly down from its earlier forecast of 6.5%. The downward revision reflects concerns over intensifying global trade tensions and prevailing economic uncertainties that could weigh on growth momentum.

Japan has long stood as a symbol of economic and technological progress, both in terms of numbers but also in terms of popular perception. However, by edging past this industrial powerhouse, India is now positioned only behind the US, China and Germany in the global pecking order.

Mahindra acknowledged the magnitude of the achievement, calling it “no small feat.” He lauded the “ambition and ingenuity of millions of Indians, across sectors, generations, and geographies” for making it possible.

However, his message was not without caveats.

“But as we celebrate, we must stay dissatisfied,” Mahindra urged, turning attention to a more long-term metric: per capita GDP. Despite India’s overall size, its income per citizen still lags behind many developed nations, including those it has now surpassed in total GDP.

“But as we celebrate, we must stay dissatisfied. Because India’s next leap must be in per capita GDP, not just overtaking Germany… For us to keep Rising, India needs sustained economic reforms — in governance, infrastructure, manufacturing, education, and capital access,” Mahindra wrote.

Economists have long echoed Anand Mahindra’s sentiments, noting that while nominal GDP growth does underscore and reflect India’s growing economic clout, yet the country still experiences persistent challenges of poverty, job creation and building human capital. India’s next leg of growth will depend upon how the country addresses these economic fundamentals.