New Delhi2 minutes ago
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India’s economy has fallen from number 5 to number 6 in the world ranking. According to the International Monetary Fund (IMF), Britain has once again overtaken India. This decline in India’s GDP has come due to the weakening of the rupee against the dollar.
India’s GDP is estimated to be $3.92 trillion in 2025 and $4.15 trillion in 2026. At the same time, Britain’s GDP is expected to be $ 4 trillion in 2025 and $ 4.26 trillion in 2026. Japan is also ahead of India, whose economy is estimated to be $ 4.38 trillion in 2022.
India is the sixth largest economy in the world
| Country | GDP (₹ lakh crore) | GDP (trillion dollars) |
| America | 3,023 | 32.38 |
| China | 1,947 | 20.85 |
| Germany | 508 | 5.45 |
| Japan | 409 | 4.38 |
| UK | 397 | 4.26 |
| India | 387 | 4.15 |
Source: International Monetary Fund (IMF)
2 main reasons for decline in ranking
There are two major reasons behind this change in India’s global ranking:
- Change in base year: The government has changed the base year of GDP from 2011-12 to 2022-23. Due to this change and new pattern, the size of the economy has decreased from 2.8% to 3.8%.
- Rupee weakness: The fall in the value of rupee against the dollar has also had an impact. The rupee witnessed a nearly 10% decline in FY26, reducing GDP measured in dollars. On the contrary, the British pound has strengthened, increasing the dollar value of their economy.
Will become the fourth largest economy in 2027, will leave Japan behind
This decline may prove to be only temporary. IMF estimates that India will take a quantum leap by 2027 (FY28) and become the world’s fourth largest economy, surpassing both Japan and Britain.
knowledge part
What is GDP?
The full name of GDP is Gross Domestic Production, which is called Total Domestic Product in Hindi.
In simple language: GDP = total amount of goods and services produced in a country in a year (in terms of their value).
- Example: factory made cars
- farmer’s wheat-rice
- Doctor-Engineer’s Services
- shopkeeper’s goods
- government road-school work
The net value created by putting all this together in a year is the GDP of the country.
Benefits of increasing GDP
- jobs increase
- Salary/wages increase
- shop business is doing well
- The government gets more taxes from which roads, schools, hospitals are built.
- Share market goes up (those who invest in mutual funds benefit)
Disadvantages of decreasing GDP
- There are fewer jobs/layoffs.
- Salary does not increase or gets cut.
- The shopkeeper’s goods are not sold.
- Farmer’s goods become cheaper.
- Unemployment increases. People reduce their expenditure. There is a possibility of recession.
What is base year?: Base year is the year in which prices are considered as base. That is, the average price of things of the same year is given a value of 100. Then, the prices of other years are compared with this base year. This shows how much inflation has increased or decreased.
Example: Suppose 2020 is the base year. That year one kg tomato was priced at ₹50. Now in 2025 it will become ₹80. So inflation = (80 – 50) / 50 × 100 = 60% increase. The same formula is used in CPI, but it applies to the entire market.
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