New Delhi: UNCTAD today (Sep 22, 2004) placed India among the top four Asian FDI (Foreign Direct Investment) destinations and said it will get more foreign investment flows as global economy rebounds this year. In its 2004 World Investment Report released in New Delhi, UNCTAD said world FDI flows have shifted from manufacturing to services, cornering nearly 70 per cent of the FDI.

The report showed that FDI inflows to India grew by 24 per cent to $4.26 billion in 2003 over $3.44 billion in 2002, putting India among top 10 FDI destinations among developing economies and fourth among Asian nations.

Launching the report, economic think-tank Research and Information System, Director General, Nagesh Kumar said, "These figures are underestimated as India is not following international definition of FDI. This could be $7 billion according to international norms."

He said as per international norms, FDI should include fresh inflows, reinvestments and borrowing by foreign subsidiaries from their parent companies, whereas India only takes into account new inflows.

According to the UNCTAD estimation, the declining trend of FDI flow worldwide will reverse in 2004 as world economies have shown some encouraging figures this year.

"Global inflows of FDI declined in 2003 for the third year in a row prompted by a fall in FDI flows to developed countries. Prospects for 2004, however, are promising," it said.

The structure of FDI flows has shifted increasingly from manufacturing to services which accounted for 60 per cent of foreign investment in 2002 at about $4 trillion.