According to the UN report, the foreign direct investment (FDI) into India grew by 17 per cent last year to USD 28 billion despite unexpected capital outflows in the middle of the year.
In 2012, the country was positioned 15th in the list. It said that foreign inflows across the world rose to levels not seen since the start of the global economic crisis in 2008.
Global FDI increased by 11 per cent in 2013 to an estimated USD 1.46 trillion, with the lion's share going to developing countries, according to the UN Conference on Trade and Development (UNCTAD) report.
Further, the UN body forecasts that the inflows would rise gradually in 2014 and 2015, to USD 1.6 trillion and USD 1.8 trillion, respectively.
As global economic growth gains momentum, this may prompt investors to turn their cash holdings into new investments, it said.
However, uneven levels of growth, fragility and unpredictability in a number of economies and risks related to the tapering of quantitative easing could dampen the FDI recovery.
FDI flows to developing economies reached a new high of 759 billion dollars, accounting for 52 per cent, during the year.
Developed countries, however, remained at an historical low (39 per cent) for the second consecutive year.
FDI inflows to developed countries increased by 12 per cent to USD 576 billion, with such investment to the European Union increasing, while flows to the United States continued their decline.
The US received USD 159 billion in FDI flows last year. The BRICS - Brazil, Russian Federation, India, China and South Africa - continued to be strong performers in attracting FDI.
Their current share of global FDI flows at 22 per cent is twice that of their pre-crisis level.