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New Delhi: India’s dream of becoming the world’s fourth-largest economy has been delayed as the depreciating Rupee and a revision in the International Monetary Fund’s (IMF) calculations have downgraded India back to Number 6.
This development has dampened the government’s ambition of trying to secure the third spot by 2027, hoping to get there through structural reforms and investments in infrastructure and skill development.
But the depreciating Rupee has been both a curse and boon, as it has made our exports more competitive even through it has shrunk the total value of the economy. Besides that, the IMF has revised the base year for GDP calculation, leading to statistical adjustments that have dampened estimates and growth projections.
A delayed, not derailed milestone
Despite the challenging global environment currently due to the Middle East crisis, 2025 has been a fairly successful year for India, with growth estimated to reach 6.7% in 2026 as well. Besides this, the consistently improved fiscal discipline and growth prospects have earned India a BBB rating upgrade after 18 years.
Though the UK has returned to the fifth spot, analysts say this remains a temporary ‘technical’ overtake, as the UK is witnessing a resilient service sector and a stronger Sterling at present.
Besides the government, economists estimate that India will reach the fifth spot by 2027, and will remain on track to become the third largest economy by 2031, based on current projections.
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