India Surpasses Japan in GDP: A Reality Check on Per Capita, Growth & Global Standing

GDP Per Capita: India vs. Japan

India has recently surpassed Japan in terms of total GDP, becoming the world’s fourth-largest economy in nominal terms. However, GDP per capita — which reflects the average income per person — tells a more nuanced story.

India’s GDP Per Capita (USD)

India’s GDP per capita has shown steady growth, driven by rapid economic development, digitalization, and a growing consumer base. While still low in absolute terms, this trend suggests strong upward momentum.

Japan’s GDP Per Capita (USD)

Japan’s GDP per capita has been stagnant or declining, especially in recent years. This is largely attributed to:

Demographic decline (aging population, low birth rates),

Slower economic growth,

Currency depreciation against the USD

Key Takeaway

• India’s per capita income is rising but still lags far behind developed economies like Japan.

• Japan remains wealthier per person, but India’s growth rate is higher, suggesting the gap could narrow over time if trends continue.

Source: World Bank, IMF, OECD, Trading Economics

Total Fertility Rate (TFR)

India’s TFR has been declining over the years.

• 2024: 2.03 children per woman

• Projected 2050: 1.29 children per woman

A TFR of 2.1 is considered the replacement level. India’s current TFR is slightly below this threshold, indicating a transition towards lower population growth

Youth Demographics

India boasts a significant young population, which can be a demographic dividend if harnessed effectively.

• Aged 0-14: 24% of the population

• Aged 10-19: 17% of the population

This youthful demographic presents opportunities for economic growth, provided there are adequate investments in education and employment.

Passport Strength

> India’s passport strength is comparatively lower on the global stage.

• Henley Passport Index 2025: Ranked 85th

• Visa-Free Access: 58 countries

This ranking reflects the limited travel freedom for Indian passport holders compared to citizens of higher-ranked countries.

> Japan’s passport strength is comparatively much more on the global stage.

• Henley Passport Index 2025: Ranked 2nd
• Visa-Free Access: 193 countries

Income Classification

According to the World Bank’s classifications:

• India: Lower-middle-income country while Japan is High income country.

• GNI per capita thresholds:

  • Low income: $1,145 or less

  • Lower-middle income: $1,146 – $4,515

  • Upper-middle income: $4,516 – $14,005

  • High income: $14,006 or more 

India’s current GNI per capita places it in the lower-middle-income bracket.

Path to Higher Income Status

India’s progression to higher income classifications depends on sustained economic growth.

• Current GDP per capita: Approximately $2,878

• Target for Upper-middle income: $4,516

• Target for High income: $14,006

Assuming an average annual GDP per capita growth rate of 6%, India could reach:

• Upper-middle income status: In approximately 8 years

• High-income status: In approximately 25 years

These projections are contingent on consistent economic reforms, infrastructure development, and human capital investment.

Challenges Ahead

Despite positive trends, India faces several challenges:

• Unemployment: High rates, particularly among educated youth, with 83% of unemployed individuals being young and two-thirds having secondary or higher education.

• Infrastructure: Need for significant improvements in transportation, healthcare, and education systems.

• Environmental Concerns: Pollution and resource management issues.

• Social Inequality: Disparities in income and access to services across different regions and communities.