Large doesn't necessarily mean a lot for standard of living, because India's population is also very large, so the amount of economy per person is a lot smaller.

India's GDP might make it 4th (by Purchasing Power Parity) or 10th (nominally), but per person it's down at 129th.

(Figures via: http://en.wikipedia.org/wiki/Economy_of_India and http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP... )