New Delhi: India''s popularity as an international investment destination appears to be increasing fast. According to a survey by Ernst and Young, India is one of the top three destinations attractive to foreign investors, along with China and the United States.

Between February and March 2007, the survey asked 809 managers from various industries in European, American and Asian firms about their investment preferences.

The survey ranked investment preferences on the basis of market and access, labour and productivity, fiscal, legal, environmental and regional issues. The United States was found to be the second-most attractive country, finding favour with 33 percent of the respondents.

According to the survey, 26 per cent of investors had cited India as being among their top three preferences in 2007, up from the 11 per cent in 2004 even as China continues to be the most attractive destination for foreign investment, the survey pointed out.

48 percent cited China as one of their top three preferred business locations in 2007, up from 41 per cent in the 2006 survey. They said they were drawn to China because of its low labour costs, more competitive rates and higher productivity.

The country''s infrastructure, quality of research and development, workforce education and political stability were cited as major advantages.

However, the survey revealed that China still lags behind in quality of workforce. Only four per cent of those surveyed said it is the most attractive country in terms of its labour skills.

In addition, only four per cent of respondents found China the most attractive economy in terms of research and development availability and quality, as opposed to 43 per cent for Europe and 27 per cent for North America.

Aside from India and China, the other two "BRIC" countries -- Brazil and Russia - featured less prominently in terms of investor interest.

Despite Russia''s abundant energy supplies, internal political uncertainties seem to deter investors. Similarly for Brazil, the considerable efforts by the government to secure macroeconomic stability have failed to convince corporate decision-makers.