Mumbai: India become the fourth largest recipient of foreign direct investment (FDI) in the Asian region surpassing South Korea as East and South East Asia became attractive destinations for overseas investors with an upward trend for FDI inflows in 2006, the United Nations Conference on Trade and Development (UNCTAD) has reported.

While FDI grew for the third consecutive year in 2006 to reach $1.2 trillion, UNCTAD warned that high commodity prices and other factors might slow economic growth this year.

FDI inflows to South, East, Southeast Asia and Oceania rose 13 per cent over 2005 to reach a high of $187 billion in 2006, it said.

China, Hong Kong and Singapore were the three largest recipients of FDI while India surpassed South Korea to become fourth largest recipient of FDI in the region, it said.
While China had consolidated its position as an important source of FDI, India is also rapidly catching up, the report noted.

UNCTAD said that overseas investment from the region also increased last year, adding that China and India are challenging the dominance of the industrialised economies as the main sources of FDI in the developing world.

"Investments in high-tech industries by transnational corporations are growing rapidly in China. Meanwhile other countries, including India, are attracting increasing FDI for traditional manufacturing," statistics released by UNCTAD show.