At the sub-regional level, the shift is slightly in favour of south, with a sustained rise in flows to South and South East Asia. FDI flows to India, Pakistan, Bangladesh and Sri Lanka were up 21 per cent, 95 per cent, 50 per cent and 17 per cent respectively. India is the fifth most preferred investment destination for foreign money, attracting $6.6 billion in 2005, against $5.5 billion in 2004.

China topped the region's chart, attracting $72.4 billion - almost six times as much as India was able to garner - followed by Hong Kong ($35.9 billion), Singapore ($20.1 billion) and South Korea ($7.2 billion).

The report says India continues to remain a favourite destination due to strong economic growth - 8 per cent plus GDP growth and 36 per cent growth in the stock market. Policies such as opening up of the retail industry to single-brand

players, permitting FDI in industries like radio and construction and raising the permitted level of foreign ownership in communications also helped India in getting foreign investments. FDI inflows were also driven by large M&As, such as the acquisition of Gujarat Ambuja by Holcim of Switzerland for $607 million.

The report adds that India and China, the two major Asian economies, are the two most attractive locations for FDI in emerging markets.

An interesting fact thrown up by the report is the decline in foreign investments by developed economies, which fell by 6 per cent to $646 billion in 2005, while global investments made by developing and transition economies have grown considerably and in 2005 stood at $133 billion or around

17 per cent of world global outflows.

In this context, India's performance has been noteworthy. Based on a three-year moving average, between 1992 and 2004, India's annual average growth rate of outward FDI flows stood over 50 per cent, the highest among the top 20 developing and transition economies.

The value of outward FDI stock of this segment as a whole reached $1.4 trillion in 2005, or 13 per cent of the world total. Developing and transition economies now account for a fourth of the total number of transnational corporations (TNC) in the world. However, the TNCs from South Asia are still much smaller than their counterparts East and South-East Asia. The report says only one company - India's ONGC - features in UNCTAD's list of top 100 developing country TNCs.

Notble amongst the approvals are: Aluminium SEZ by M/s Hindalco Industries in Sidhi district in Madhya Pradesh. (In-principle approval)., Lotus Footwear Enterprise (contract manufacturers for NIKE Shoes) to be set up in Thiruvannamalai in Tamil Nadu. (Formal approval), Suzlon Infrastructure Limited for High tech

engineering including non-conventional energy equipment in Coimbatore, Tamil Nadu. (Formal approval). Best and Crompton for a Textile and Apparel Park to be set up in Krishnagiri District in Tamil Nadu. (In-principle approval). 2 Multi product SEZs by M/s New Kolkata International Development Pvt. Ltd (a company promoted by Salim Group

of Indonesia) in West Bengal with an investment of Rs.12500 crores. (In-principle approval). Three proposals from Videocon Realty and Infrastructures Limited for setting up of 2 Multi products and one Electronics SEZ in West Bengal. (In-principle approval). With this, the total number of formal approvals has become 189 and in- principle approvals has become 145.