<P> Foreign direct investment (FDI) in India has reached 2% of GDP, compared with 0.1% in 1990, and Indian investment in other countries rose sharply in 2006 . </P> <P> As the third - largest economy in the world in PPP terms, India is a preferred destination for FDI; India has strengths in information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewelry . Despite a surge in foreign investments, rigid FDI policies resulted in a significant hindrance . However, due to some positive economic reforms aimed at deregulating the economy and stimulating foreign investment, India has positioned itself as one of the front - runners of the rapidly growing Asia - Pacific region . India has a large pool of skilled managerial and technical expertise . The size of the middle - class population stands at 50 million and represents a growing consumer market . </P> <P> India's liberalised FDI policy as of 2005 allowed up to a 100% FDI stake in ventures . Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and FDI . The upward moving growth curve of the real - estate sector owes some credit to a booming economy and liberalised FDI regime . In March 2005, the government amended the rules to allow 100 per cent FDI in the construction business . This automatic route has been permitted in townships, housing, built - up infrastructure and construction development projects including housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, and city - and regional - level infrastructure . </P> <P> A number of changes were approved on the FDI policy to remove the caps in most sectors . Fields which require relaxation in FDI restrictions include civil aviation, construction development, industrial parks, petroleum and natural gas, commodity exchanges, credit - information services and mining . But this still leaves an unfinished agenda of permitting greater foreign investment in politically sensitive areas such as insurance and retailing . FDI inflows into India reached a record US $19.5 bn in fiscal year 2006 / 07 (April--March), according to the government's Secretariat for Industrial Assistance . This was more than double the total of US $7.8 bn in the previous fiscal year . The FDI inflow for 2007 - 08 has been reported as $24 bn and for 2008 - 09, it is expected to be above $35 billion . A critical factor in determining India's continued economic growth and realising the potential to be an economic superpower is going to depend on how the government can create incentives for FDI flow across a large number of sectors in India . In September 2012 the government approved 51% FDI in multi-brand retails despite a lot of pressure from coalition parties . </P>

Globalisation policy was initiated by the government of india in which year