10 Most Influential Countries: India Slips from 4th to 6th

The big story highlighted by the report is the rise of Brazil in the rankings from eighth to fifth place, just behind Germany (up three places from sixth) and Britain (down a spot to fourth place) but ahead of France and Russia, which are down to seventh and eighth positions, respectively.

The overall ranking shows that the U.S. remains the world’s most influential nation. Its problems in Afghanistan, Pakistan, Syria and Iran in a bruising presidential election year have, however, seen its aggregate score slip marginally.

“The GPI report captures trends. By definition, India’s rankings are forward-looking. Despite poor political leadership at the centre, India’s fundamentals remain strong,” said Merchant.

“But warning signs abound. The demographic dividend will last till 2030. However, it could turn into a demographic debt if India’s economy either does not create enough jobs for the millions of new working-age people or does not give those workers the skills needed in a modern, high-productivity economy,” she said.

As 2012 unfolds, India will confront several geopolitical challenges: a rising China in a new leadership role, turbulence in Pakistan and Afghanistan, traditional ally Russia distracted by internal dissent, new strategic ally U.S. disengaged in a tough presidential election year, and the Middle East in turmoil, she added.

“Most crucially, New Delhi must fix the problems that have paralysed its economic policy reforms over the past year in order to play more important role in world affairs,” the report said.