A worker at a company processing steel in Khopoli, India, in 2014.
Bloomberg/Getty Images
April 15, 2015 4:34 AM EDT

India’s economic growth may surpass China’s much sooner than initially expected, with the International Monetary Fund (IMF) forecasting earlier this week that Delhi will take the lead in 2015.

The IMF’s World Economic Outlook, released Tuesday, indicates that India’s growth rate will rise to 7.5% this year, while China’s is expected to drop to 6.8% from 7.4% last year.

India’s growth will “benefit from recent policy reforms” under new Prime Minister Narendra Modi, the report says, with the resulting rise in investment and reduction in oil prices. “Lower oil prices will raise real disposable incomes, particularly among poorer households, and help drive down inflation,” it predicts.

The IMF forecast was substantiated by a Monday report from research firm Capital Economics, which said consumer price inflation dropped unexpectedly in March and raised the possibility of a third unscheduled cut in interest rates this year.

China’s declining growth over the past year has also been well documented, and Bloomberg reported Wednesday that Japan will soon overtake it as the United States’ largest overseas creditor.

With the World Bank also predicting that India’s growth rate will hit 8% by 2017, it looks like the upward economic trajectory anticipated by many when Modi came to power could have begun.

Read next: What I Learned in India About Financial Advice

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Write to Rishi Iyengar at rishi.iyengar@timeasia.com.

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