Government has permitted up to 20 percent Foreign Direct Investment (FDI) under automatic route in Life Insurance Corporation of India (LIC) with an aim to facilitate disinvestment of the country's largest insurer. Sources said that the decision in this regard was taken by the Union Cabinet, chaired by Prime Minister Narendra Modi yesterday.

Department for Promotion of Industry and Internal Trade (DPIIT) had mooted the proposal to allow FDI in LIC, after taking views from the Ministry of Finance. The much-awaited initial public offering, IPO of LIC is expected to hit  the market in March and LIC's employees and policyholders would get a discount over the floor price.