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Despite the Russia-Ukraine war, US monetary policy, and other global uncertainties, the Indian economy is projected to remain healthy. India may attract the eyes of overseas investors in 2023 as well on account of measures such as the rollout of the production-linked incentive (PLI) schemes and the projection of healthy economic growth.

India has so far received healthy foreign direct investment (FDI) in 2022. As per the latest figures of the government, India has registered its highest-ever total FDI inflows of $84.84 billion in 2021-22.

However, the FDI inflow contracted by 14% to $26.9 billion during the April-September period this fiscal. The total FDI inflows (which include equity inflows, reinvested earnings, and other capital) has declined to $39 billion during the first half of this fiscal as against $42.86 billion in the year-ago period.

Total FDI into India reached $887.76 billion between April 2000 to September 2022.

About 26% of the FDI came through the Mauritius route. It was followed by Singapore (23%), the US (9%), the Netherlands (7%), Japan (6%) and the UK (5%). The UAE, Germany, Cyprus, and Cayman Islands accounted for 2% each.

The key sectors which attracted the maximum FDI include the services segment, computer software, and hardware, telecommunications, trading, construction development, automobile, chemicals and pharmaceuticals.

Although FDI is allowed through the automatic route in most sectors, in certain areas such as telecom, media, pharmaceuticals and insurance, government approval is required for foreign investors.

Under the government approval route, a foreign investor has to take prior nod of the respective ministry or department, whereas, for the automatic route, an overseas investor is only required to inform the Reserve Bank of India (RBI) after the investment is made.

At present, FDI is prohibited in nine sectors -- lottery, gambling and betting, chit funds, nidhi company, real estate business, and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco, news agency PTI informed.

On the other hand, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) Anurag Jain said India is the preferred investment destination due to a series of measures such as liberalisation in the FDI policy, steps to further promote ease of doing business, reducing the compliance burden for industry, the rollout of the PLI schemes among others.

He added that players worldwide are keen to avail the benefits of the PLI schemes and several global firms are looking to shift their manufacturing bases to India.

The PLI scheme was announced for 14 sectors, including white goods, telecom and auto components with an outlay of 1.97 lakh crore to enhance India's manufacturing capabilities and exports. So far, 650 applications have been approved under 13 sectors.

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