"India was the highest ranked country by capital investment in 2015, with $63 billion-worth of FDI projects announced," according to FDI Intelligence, a division of The Financial Times Ltd.
Also there was an 8 per cent increase in project numbers to 697.
"All this while China saw a 23 per cent decline in capital investment and a 16 per cent drop in FDI projects. India replaced China as the top destination for FDI by capital investments, following a year of high-value project announcements," it said in a preview.
"For so long trailing in China's wake, India is now the great global growth story."
The report said, yet, China's new phase of development may well have the stronger global impact, since its highly ambitious initiative to revitalize the Silk Road and create bold new logistics to Europe can generate investment and boost connectivity between the two continents.
India replaced China as the top destination for foreign investment following a year of high-value project announcements and maintaining the current momentum will be a monumental task faced by Prime Minister Narendra Modi government, said Courtney Fingar, editor-in-chief of FDI Magazine.
Major companies such as Foxconn and SunEdison have agreed to invest in projects valued at $5 billion and $4 billion, respectively, in India in 2015, it said. "India replaced China as the top destination for FDI by capital investment following a year of high-value project announcements specifically across the coal, oil and natural gas and renewable energy sectors," the report said.
"Longer term challenges must also be faced head on, including improving India’s infrastructure, reducing bureaucracy and tackling inequality. How well these are addressed will have significant effect on future continued competitiveness of India as an investment destination."
China is looking outward to solve some of its problems such as excess capacity due to slowing demand and this will not be without consequence to the rest of the world.
The FDI report specifically mentioned the alleged dumping of Chinese steel distorting the global market, and countries such as the UK feeling the effects in a painful way. The report said many have blamed this for the Tatas' plans to sell off their UK steel units.
With regards to the global play, the report said greenfield investment were on recovery phase.
"But it is a sketchy recovery and not entirely a convincing one. The report reveals capital investment increased by 9 per cent in 2015, to $713 billion, while the number of jobs created through foreign capital grew by 1 percent to 1.89 million," Fingar said.
In a tweet, Minister of State for Finance Jayant Sinha said: "India emerges on top in attracting FDI".
China suffered a 23 per cent decline in capital investment and a 16 per cent drop in FDI projects. Among the emerging economies, greenfield FDI inflow in India and China was followed by Indonesia (USD 38.5 billion), Mexico (USD 24.3 billion) and Brazil (USD 17.3 billion).
The report said in 2015, greenfield FDI continued to show signs of recovery, with capital investment increasing by nearly 9 per cent to USD 713 billion, alongside an increase in job creation by 1 per cent to 1.89 million. However, the number of FDI projects declined 7 per cent to 11,930.