India has overtaken Japan to become the world's 4th largest economy with a Gross Domestic Product valued at approximately USD 4.18 trillion, consolidating its position as Asia's second-largest economy after China. This milestone — achieved in the financial year 2025-26 — comes on the back of robust domestic demand, a manufacturing resurgence driven by the Production Linked Incentive (PLI) schemes, and a buoyant services sector. India's real GDP growth in 2025-26 is estimated at 7.4%, outpacing most major economies globally. Growth in 2026-27 is projected in the range of 6.8% to 7.2%, supported by continued government capital expenditure, private investment recovery, and strong consumption. Retail inflation has declined from 4.6% in 2024-25 to approximately 1.7% in April-December 2025, improving real purchasing power and supporting consumption growth. The RBI's recent rate-cutting cycle has further supported domestic demand. The PLI scheme has attracted cumulative investment of over ₹2.16 lakh crore, with production/sales worth more than ₹20.41 lakh crore achieved across 14 sectors including mobile phones, pharmaceuticals, electronics, and textiles. India's GDP trajectory — from the world's 10th largest economy in 2014 to 5th in 2022, and 6th in the latest 2026 IMF WEO — reflects its emergence as a structural growth story. Challenges remain, including the full impact of US tariffs on Indian exports, rural-urban income disparities, and the need to sustain job creation at scale for its young demographic. India's goal is to become a USD 5 trillion economy by 2027 and a Viksit Bharat (Developed India) by 2047.