The annual list, released today by Geneva-based World Economic Forum (WEF), comes at a time when the new Indian government led by PM Narendra Modi completed 100 days in power and has promised further steps to revive its economy and the ease of doing business in the country.
"Continuing its downward trend and losing 11 places, India ranks 71st. The country's new government faces the challenge of improving competitiveness and reviving the economy, which is growing at half the rate of 2010," WEF said.
As per the Global Competitiveness Report 2014-15, Switzerland is the most competitive economy, followed by Singapore and United States.
Other countries in the top ten are Finland (4), Germany (5), Japan (6), Hong Kong SAR (7), Netherlands (8), United Kingdom (9) and Sweden (10).
China, which has improved its position by one place to 28th spot, leads the BRICS grouping, among which India has the least ranking. Russia is ranked at 53rd position, followed by South Africa (56) and Brazil (57).
"India's decline of 11 places to 71st, set against the gains of the ASEAN 5 countries, suggests that the competitiveness divide South and Southeast Asia is becoming more pronounced," WEF said.
Besides India, WEF said that some of the world's largest emerging market economies continue to face difficulties in improving competitiveness. These include Saudi Arabia (24th rank), Turkey (45), Mexico (61), Nigeria (127th), South Africa and Brazil -- all of them have slipped in their rankings.
According to the report, India's slide in the competitiveness rankings began in 2009, when its economy was still growing at 8.5 per cent (it even grew by 10.3 per cent in 2010).
"Back then, however, India's showing in the GCI was already casting doubt about the sustainability of this growth.
"Since then, the country has been struggling to achieve growth of 5 per cent. The country has declined in most areas assessed by the GCI since 2007, most strikingly in institutions, business sophistication, financial market development, and goods market efficiency," it added.
Noting that improving competitiveness would yield huge benefits for India, WEF said it would help re-balance the economy and move the country up the value chain ensuring more solid and stable growth.
"This in turn could result in more employment opportunities for the country's rapidly growing population," it added.