Best countries for business: India's rank at a dismal 93

India must improve its business environment in order to improve its ranking on the Forbes list of best nations for business.

India has not fared well in Forbes' list of the best countries for business this year, ranking 93rd out of 146 nations, behind countries like Mexico, Kazakhstan and Sri Lanka as it cited challenges like poverty and corruption that the country needs to address.

Denmark topped Forbes' 9th annual ranking of the Best Countries for Business, followed by Hong Kong, New Zealand, Ireland and Sweden.

The US lags behind many other developed nations when it comes to its business climate, and the gap is growing, Forbes said.

The US ranks 18th in the Forbes list, down four spots from last year.

It marks the fifth straight year of declines since 2009, when the US ranked second. India ranks 93rd, with Forbes saying that while the country is developing into an open-market economy, "traces of its past autarkic policies" still remain.

"The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy," it said.

Forbes cited many challenges that India has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights and decades-long civil litigation dockets.

Forbes said India's growth in 2013 fell to a decade low, as its economic leaders "struggled" to improve the country's wide fiscal and current account deficits.

Rising macroeconomic imbalances in India and improving economic conditions in Western countries, led investors to shift capital away from India, prompting a sharp depreciation of the rupee.

However, investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilisation of the rupee, it said.

Forbes determined the Best Countries for Business by grading 146 nations on 11 different factors of property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance.

India ranked 122 on the trade freedom index, 135 in monetary freedom, 120 in technology, 122 in tax burden and 128 in red tape.

It however fared well on the market performance index, ranking third, and 7th on investor protection.

It ranked 78th on the corruption parameter and 55 on property rights.

Pakistan was ranked 105 in the list. Guinea, the West African nation at the center of the Ebola outbreak, ranks last for the third straight year.