For the first time in the last four years, India has dropped out of the list of top 10 destinations for Foreign Direct Investment (FDI) in terms of its attractiveness in 2018. This is a result of implementation challenges faced by the country post demonetisation and launch of Goods and Services Tax (GST), according to an AT Kearney report.

The report ranked India on the 11th spot this year, down by three spots, reversing its two-year streak of rising in the rankings. The country was ranked eighth in 2017 and ninth in 2016.

“India ranks 11th in this year’s Index, holding its position as the second-highest ranking emerging market, but falling out of the top 10 for the first time since 2015,” read the report.

The report further elaborated the reasons behind the fall in India’s ranking. As per the report, “some policies, however, may have deterred investors—at least in the short term. The 2017 nationwide goods and services tax, for example, has faced implementation challenges, and the 2016 demonetization initiative disrupted business activity and weighed on economic growth.”

The report was released even as Minister of State for Commerce and Industry CR Chaudhary informed Parliament about FDI inflow to India. As per the minister, as many as six sectors, including coal production, ports, dye stuffs and coir industries, have failed to attract any FDI in 2017-18, while defence industries have attracted a meagre $10,000 (about Rs 7 lakh) during this period.

Growth rate of FDI in India recorded a five-year low of 3 percent at $44.85 billion in 2017-18, the minister said in a written reply to Lok Sabha on July 23.

(With inputs from PTI)