India's share in worldwide foreign exchange market turnover has grown to 0.9 per cent this year, marking a three-fold jump from just 0.3 per cent in 2004.

This is the fastest increase in market share for any other country in the world, according to data compiled by Switzerland-based Bank for International Settlement (BIS).

In comparison, world's largest forex market the United Kingdom has recorded a much lower change, in percentage terms, in growth to 34.1 per cent of share in 2007 from 31.3 per cent three years ago.

The US, second largest market, saw a slowdown in its share growth to 16.6 per cent this year from 19.2 per cent in 2004. Japan, third largest market, also saw its market share easing to 6 per cent from 8.3 per cent three years ago.

"The growth of India among the emerging nations was notable and as the report says, it possibly reflected the efforts of Indian authorities in recent times to ease control on capital movements," BIS said in its latest Central Bank Survey of Foreign Exchange and Derivatives Market Activity report.

Besides the highest three-fold jump in market share, India also recorded second highest growth in the daily average forex market turnover after China.  According to BIS data, India's daily average forex market turnover rose to $34 billion in 2007.

The growth rates were much lower in developed markets. The US saw its turnover rising to $664 billion this year, from $461 billion in 2004, while it rose from $753 billion to $1,359 billion in the UK during the same period.

Indian rupee's market share in the worldwide average daily turnover has also increased to 0.7 per cent in 2007, as against just 0.3 per cent in 2004. Rupee's market share in1998 and 2001 stood at 0.1 per cent and 0.2 per cent respectively.

Overall, emerging market currencies were involved in almost 20 per cent of all transactions in April 2007.  According to the report, there is an unprecedented rise in activity in traditional foreign exchange in the last three years.

"Average daily turnover (worldwide) rose to $3.2 trillion in April 2007, an increase of 71 per cent at current exchange rates and 65 per cent at constant exchange rates. This increase was much stronger than the one observed between 2001 and 2004," it noted.

Further, in the backdrop of low financial market volatility and risk aversion, there has been a significant expansion in activities of investor groups including hedge funds, which was partly triggered by growth in the use of prime brokerage and retail investors, BIS said.

Moreover, increased levels of technical trading such as algorithmic trading and institutional investors holding more internationally diversified portfolios are also cited as possible reasons for boosting the foreign exchange market activities. The BIS study has considered the daily average figures for the month of April.