Increased investments in traditional manufacturing sector helped India surpass South Korea to become Asia's fourth largest FDI recipient in 2006, a UNCTAD report said.

Worldwide, foreign direct investment grew in 2006 for the third consecutive year to reach $1.2 trillion, the UN Conference on Trade and Development said, but warned of slow economic growth this year due to high commodity prices and other factors.

It said FDI inflows to South, East, Southeast Asia and Oceania reached a new high of 187 billion dollars in 2006, showing an increase of 13 per cent over 2005.

Investment to developed nations rose by 48 per cent to $800 billion last year, well over the levels of the previous two years.

India, it said, surpassed South Korea to become the fourth largest recipient in the region while China, Hong Kong and Singapore were the three largest recipients.

"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.

UNCTAD said that outward investment from this region also increased last year, noting that China had consolidated its position as an important source of FDI, while India too is rapidly catching up.