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Barack Obama on Wednesday became the first sitting US president to slide out of the top two power rankings as published by Forbes, beaten not just by Vladimir Putin but also Angela Merkel.
From the Arab world, King Salman bin Abdulaziz, Saudi Arabia's new monarch and Custodian of the Two Holy Mosques and HH Shaikh Khalifa bin Zayed Al Nahyan, UAE President, also made it to the list at number 14 and 39, respectively.
The magazine published its seventh annual ranking just weeks after Putin opened a new front in the Syria war by conducting air strikes, then Putin hosted Syrian President Bashar Al Assad in Moscow.
Among other Arab leaders who feature on the list include Egyptian President Abdel El Sisi (49)and Saudi Oil Minister Ali Al Naimi (53).
Indian Prime Minister Narendra Modi has been ranked as the world's ninth most powerful person, climbing up from 14th in the 2014 Forbes list of world's powerful people.
Forbes added that governing 1.2 billion people in India requires more than "shaking hands" and that Modi must pass his party BJP's reform agenda and keep "fractious opposition" under control.
About Modi, the magazine said that India's "populist" Prime Minister presided over 7.4 per cent GDP growth in his first year in office, and "raised his profile" as a global leader during official visits with Barack Obama and Xi Jinping.
"A barnstorming tour of Silicon Valley reinforced his nation's massive importance in tech. But governing 1.2 billion people requires more than shaking hands: Now Modi must pass his party's reform agenda and keep fractious opposition under control," it said.
"As Obama enters the final year of his presidency, it's clear his influence is shrinking, and it's a bigger struggle than ever to get things done," Forbes wrote.
"At home, his approval ratings are perpetually stuck under 50 percent; abroad, he's outshined by Merkel in Europe, and outmaneuvered by Putin in the Middle East."
In August, Putin's domestic approval rating soared to 87 percent, the highest level in six years, according to an independent polling center.
His intervention in Syria has seen Putin seek to muscle his way back to global influence after months of Western isolation over Ukraine.
"Putin continues to prove he's one of the few men in the world powerful enough to do what he wants - and get away with it," said Forbes.
Despite international sanctions imposed after Moscow annexed Crimea and over the conflict in Ukraine, Putin has made the US and NATO look weak, and helped rebuild Russian influence abroad, Forbes said.
The German chancellor, jumped up three places to grab the second spot, last year occupied by Obama.
"Merkel is the backbone of the 28-member European Union, and her decisive actions dealing with the Syrian refugee problem and the Greek credit crisis helped bump her up the list," Forbes said.
Pope Francis was number four and Chinese leader Xi Jinping number five, falling two spots from last year. The 2015 list ranks 73 powerbrokers among 7.3 billion people on the planet.
Among the eight newcomers were Saudi Arabia's King Salman and US presidential candidates Hillary Clinton and Donald Trump at number 58 and 72 respectively.
Thirty on the list come from the United States, eight come from China, and four each from Japan and Russia.
Nine women made the cut.
The youngest on the list are 31-year-old Facebook CEO Mark Zuckerberg, at number 19, and North Korea's 32-year-old leader Kim Jong-un at number 46.
The entire list can be seen at www.forbes.com/power
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