In the 'Ease of Doing Business' ranking of 189 economies, India has dropped from 131 spot last year while Singapore continues to remain at the top.
Singapore is followed by Hong Kong and New Zealand at the second and third positions, respectively.
Other nations in the top ten are United States (4), Denmark (5), Malaysia (6), Korea (7), Georgia (8), Norway (9) and United Kingdom (10).
India has been ranked lower at 179 in terms of ease of starting a business in the 2014 list at a time when its government is making efforts to improve the country's business climate. Last year, based on this criteria India was placed at 177th spot.
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"The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy.
"Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business," the report said.
India had earlier expressed concerns about the report.
Recently, a government-appointed panel had suggested a slew of measures to improve the country's business climate.