india 4th largest economy
India has officially surpassed Japan to become the world's fourth-largest economy, a milestone confirmed by NITI Aayog CEO B.V.R. Subrahmanyam during the 10th Governing Council meeting of the policy think tank. Citing IMF data, Subrahmanyam announced that India's economy has reached a $4 trillion valuation, positioning it behind only the United States, China, and Germany.
India's Economic Ascent: From Reform to Resilience
India's journey to this economic pinnacle has been marked by strategic reforms and robust growth. The liberalization policies initiated in the early 1990s laid the foundation for an open-market economy, fostering increased foreign investment and private enterprise. Over the decades, India has diversified its economic base, with significant contributions from the services sector, manufacturing, and agriculture.
Recent data underscores this upward trajectory. According to a Reuters poll, India's GDP growth likely accelerated to 6.7% year-on-year in the January-March 2025 quarter, up from 6.2% the previous quarter. This growth was driven chiefly by improved rural consumption due to better agricultural output and moderated inflation.
Sectoral Drivers of Growth
1. Information Technology and Services
India's IT and business process management (BPM) sector has been a significant growth driver. In FY24, the IT-BPM industry generated approximately $253.9 billion in revenue, with export revenue estimated at $194 billion. The sector employs over 5.4 million people, highlighting its role in economic expansion.
2. Manufacturing and 'Make in India'
The 'Make in India' initiative has bolstered manufacturing, attracting global companies to set up operations domestically. This push has enhanced industrial output and created employment opportunities, contributing to GDP growth.
3. Agriculture and Rural Economy
Agriculture remains a cornerstone of India's economy. Recent quarters have seen improved agricultural output, boosting rural consumption and supporting overall economic growth. Government initiatives aimed at rural development have further strengthened this sector.
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