The country, last year, stood at the 27th spot for effective regulation and supervision of securities exchanges.
South Africa is on the top followed by Finland, Hong Kong SAR, Luxembourg and Singapore in this category, says the report.
Besides, neighbouring countries Pakistan and China are also placed at a better position than India on the parameter at 51 and 58 position respectively.
The findings are part of WEF's Global Competitiveness report 2014-15, where India has been ranked among a total 144 countries across the globe.
The performance review was based on 12 pillars including development of the financial markets. A value of 1 for regulation of exchanges implies 'not at all effective' while 7 represents 'extremely effective'.
Meanwhile, the country has also slipped to the 39th place from 18th rank in terms of easiness for companies to raise money by issuing shares on the stock market, the report said.
Hong Kong SAR followed by Taiwan, China and South Africa were found to be countries where raising money through equity markets was the easiest.
Meanwhile, India has shown improvement with regard to strength of investor protection.
The country has been ranked at 34th place along with Pakistan, Montenegro and Chile, among others, in the report.
WEF's last year report had ranked India at 41st position with regard to 'strength in investor protection'.
A host of positive developments on domestic as well as global front has helped the Indian capital markets go on winning spree in the recent times.
According to a report by Bank of America Merrill Lynch, the Indian benchmark Sensex is the best performing index among major global markets so far in 2014 and is expected to double over the next four years.
Continuing their record setting spree, both the benchmark indices, Sensex and Nifty surged to their historic intra-day peaks of 27,225.85 and Nifty 8,141.90 last week on aggressive buying as a result of strong foreign capital inflows on the back of robust economic growth.