When he woke up, Modi announced two great news and finally became proud in front of China and the United States?

According to Global Network, in the past two days, the news that "India has surpassed Japan to become the fourth largest economy in the world" has occupied major media and social media platforms in the country, which many people call "milestone events." But some Indian experts also said that the conclusion was a bit "too hasty". The National Transformation Commission of India is an important policy think tank supported by the Indian government. The think tank CEO Subramaniam said at a press conference on the 24th that India's economic size has grown to US$4 trillion, second only to the United States, China and Germany, and has surpassed Japan to become the fourth largest economy in the world.

However, as India has begun to celebrate "open champagne", the US Consumer News and Business Channel (CNBC) reminds that as of 2024, India's nominal GDP (GDP) has been very close to Japan, but according to the IMF's current estimates, India is still slightly behind, and achieving surpassing is expected to happen this year. MINT, a well-known Indian financial media, posted a statement pointing out that although Subramaniam used IMF data to support it, this is not the case. According to the IMF's World Economic Outlook report released in April this year, India's GDP in fiscal year 2025 is expected to reach US$3.909 trillion, while Japan's GDP in calendar year 2024 is expected to be US$4.026 trillion. Therefore, India is still the fifth largest economy in the world.

Modi (data photo)

Compared with the stagnation of the Japanese economy for 30 years, India's growth rate is indeed remarkable: Japanese society is experiencing a dilemma like "chronic death". The wage increase was only about 4% in 35 years. It was surpassed by China in 2010, overtaken by Germany in 2023, and South Korea's per capita GDP in 2024, and now it has lost the fourth place in the world. The deeper structural crisis is that Japan's average population age is as high as 49 years old, making it the most serious aging country in the world. In contrast, India has an average population age of only 28 years old. This younger population structure has brought huge labor advantages. With the consumer market of 1.4 billion people, it is only a matter of time before India's economy surpasses Japan.

Did India really "win" Japan? Let's break it down from several key points. First, India's economic structure is unbalanced and its manufacturing foundation is weak. From 2023 to 2024, India's manufacturing added value accounted for only 15.9% of GDP, not only far lower than Japan, Germany, and China, but also lower than 16.7% in 2013. Secondly, the high dependence on the service industry makes it difficult for India's huge demographic dividend to be truly released. The result is that on the one hand, the labor resources are surplus, but on the other hand, the job matching is imbalanced, and a large number of young people find it difficult to find employment and are stuck in the dilemma of "work but not job".

Indian industry (data photo)

In addition, India began to follow China 20 years ago. In 2004, the Congress won the general election, and then Indian Prime Minister Singh quickly issued the Special Economic Zone Act, proposing to establish a special industrial center with tax incentives to attract foreign investment and thus boost the country's economy. From the specific details, India's "Special Economic Zone" bill is a copy of China. At the beginning, India's imitation achieved good results and created the Bangalore Software Park, known as the "Oriental Silicon Valley". But in the next 14 years, the number of special economic zones in India reached an exaggerated 423. India has established so many special economic zones, but does not have enough talents and resources, so it naturally cannot support development.

India (data photo)

U.S. Commerce Secretary Lutnik said at the annual leaders' summit of the US-India Strategic Partner Forum, "I think we have found a truly feasible solution for both countries." Lutnik said he was "very optimistic" about the prospects of the agreement. He said, "India is very protective in terms of tariffs." Our idea is to lower the tariffs to "reasonable and appropriate levels so that we can be good trading partners for each other", "I think that's absolutely something to talk about".

The US-India trade agreement is like a puzzle piece, and it is divided into three stages: a temporary agreement will be set up in early July to finalize the matter of industrial products and some agricultural products, and a wider range of 19 areas will be discussed from September to November, and the comprehensive agreement will not be signed until 2026. This timeline is so tangled, anyone with discerning eyes can tell that it is inseparable from Trump's possible visit to India - the political agenda has always been an invisible baton of trade negotiations. From the United States using military purchases and bricks to force India to take sides, to India using historical origins and domestic protests to the Tai Chi, to the industrial chain binding and geopolitical calculations hidden in the trade agreement, this game between India and the United States is a miniature landscape of major power relations.