UPS sees 2010 volume growth, higher rates

* Sees volume growth in 2010 on gradual global recovery

* Says U.S. holiday season to be better than expected

* Will announce rate hike for 2010 in late November

* Will keep making investments in India

(Updates with details)

By Harry Suhartono

SINGAPORE, Nov 11 (Reuters) - United Parcel Service Inc (UPS.N), the world's largest package delivery service, expects growth in its volumes next year as the global economy gradually recovers, its chief said on Wednesday.

UPS CEO Scott Davis told Reuters the company will hike shipping rates for 2010, which follows a similar move by rival Fedex (FDX.N), and it will announce the size of the hike later this month.

"I think we will go back to see positive volumes next year as the economy improves," Scott said in an interview, ahead of a meeting of Asia-Pacific corporate and political leaders in Singapore.

Global cargo companies have been hit by a sharp decline in consumer spending, especially in the United States, as the financial crisis has hurt businesses and boosted unemployment.

Davis told a business luncheon earlier on Wednesday that a global economic recovery will happen in a gradual manner.

"I believe the recovery is real, but it is gradual. It is sustainable but vulnerable."

He said this will lead the U.S. holiday season to be slightly better than expected.

"We talked to our customers in recent months, mainly our retail and technology customers, and many of them are quite bullish on this Christmas season while others are pretty cautious," Davis said.

"Most people, the consensus, are saying it is going to be a pretty flat holiday in the U.S. I think it will be slightly better than that," he added.