On the list, compiled by World Economic Forum (WEF), other emerging economies such as Russia, China, Brazil and South Africa are ranked ahead of India.
In the top-ten, Finland is followed by Norway, Switzerland, Canada, Japan, Sweden, Denmark, Netherlands, New Zealand and Belgium.
WEF said the list has been compiled on the basis of 46 indicators about "how well they are developing and deploying their human capital, focusing on education, skills and employment".
The major countries ranked above India include France (14th rank), the US (17th), the UK (19th) and Germany (22nd).
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Among BRICS nations, Russia comes on the top at 26th position, followed by China at 64th, Brazil at 78th place and South Africa at 92nd.
The countries with better score than India also include Kazakhstan, Armenia, Kyrgyz Republic, Chile, Philippines, Serbia, Mongolia, UAE, Macedonia, Sri Lanka, Azerbaijan, Tajikistan, Mauritius, Barbados, Brazil, Guatemala, Bhutan, Honduras, Cambodia, Tunisia and Bangladesh.
WEF said that 14 countries have reached 80 per cent human capital optimisation, while 38 countries score between 70 per cent and 80 per cent.
In Asia and the Pacific, where the majority of the world's population is concentrated, the spread between the highest and lowest performing countries is among the widest.
After Japan, the best performing countries are New Zealand (9), Australia (13) and Singapore (24), while Nepal (106), Myanmar (112) and Pakistan (113) occupy the lowest positions.
After China and India, the region's third most populous nation, Indonesia, holds the 69th spot. Iran is ranked 80th.