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Yash S
Founder @ Innovzeal ... • 4d
In 2025, India officially became the world’s fourth-largest economy by nominal GDP, overtaking Japan. For those who recall similar headlines from the 2009–2014 period, the distinction lies in what’s being measured. Back then, India rose to third place globally by Purchasing Power Parity (PPP)—a metric that compares economies based on relative cost of living and inflation. PPP tells us how much a rupee can buy at home, not how much India’s economy weighs on the global stage. What’s changed now is India’s nominal GDP—measured in US dollars—has overtaken Japan’s. This is what global investors, rating agencies, and financial institutions care about. It reflects real size, not just local value. The difference isn’t just technical—it’s geopolitical. In PPP, India’s economy looked big. In nominal terms, it now is big. And that makes all the difference in how the world sees India today.
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