Bank of Japan governor Toshihiko Fukui also urged India to loosen restrictions on capital flows and develop domestic bond markets so as to further integrate itself into the global economy.

"Everyone recognises the large and varied influence India is having on the world," he said told a symposium in Tokyo.

"If we extend the current (growth) rate, India's purchasing power parity will exceed that of Japan by around 2025 and will rank third after the United States and China," he added.

Fukui also pressed India to minimise environmental damage and take steps to boost energy efficiency to help curb high energy prices.

India is expected to report Thursday that its economy expanded at a record 9.2 percent in the past financial year despite a series of monetary tightening measures by the central bank to cool inflation, analysts say.