China has retained its top position as the world's most attractive investment destination followed by the US and Indonesia at second and third place, according to the UNCTAD's World Investment Report 2014.
"India is the fourth most favoured investment destination in 2014," FDI expert and policy analyst Premila Nazareth Satyanand said after releasing the UNCTAD's report today.
In 2013, India was the world's third most attractive destination for investment by transnational corporations. India was the second most favoured investment destination in 2005, 2006, 2007, 2008 and 2010.
India ranked 14th among the top 20 global economies, receiving the maximum FDI in 2013, it added.
Global FDI inflow's rose by 9 per cent to USD 1.45 trillion in 2013. FDI inflows increased in all major economic grouping - developed, developing and transition economies.
The report further said that global FDI flows will rise to USD 1.6 trillion in 2014 and USD 1.75 trillion in 2015.
Commenting on the report, Finance Secretary Arvind Mayaram said, "FDI, if you look at in India from year on year, you may find a variation which you are seeing now, which shows there is a decline in FDI flows."
The report further said that the opening up of multi-brand retail in 2012 has not generated the results that were expected.
Foreign investment is considered crucial for India, which needs an estimated USD 1 trillion in the five-year period ending March 2017 to overhaul infrastructure such as ports, airports and highways to boost growth.
A decline in foreign investment could affect the country's balance of payments and the rupee.
To further attract foreign inflows, the government plans to relax the FDI policy in sectors such as defence, railways and construction activities.