Online retailer Amazon is in advanced stage of talks to buy around 9.5 per cent stake in Kishore Biyani-led Future Retail, according to sources.

A final shape to an agreement between the two parties is expected to take place within the next 10 days, the sources said although in case of last minute hurdles the deal could be announced as late as January 2019.

When contacted, Amazon declined to comment while messages sent to Future Group founder and Group CEO Kishore Biyani remained unanswered by the time of filing story.

According to a media report, the Amazon-Future Group deal is initially estimated to be around Rs 20 billion executed under foreign portfolio investor (FPI).

The agreement could also include Amazon buying out Biyani and promoter group's entire holding in future subject to applicable regulations in India.

As of September 2018, promoter and promoter group had 46.51 per cent share of Future Retail Ltd, which operates hypermarket and supermarket under brands which include- Big Bazaar, Easyday, Foodhall, HyperCity, FBB, Heritage fresh, ezone and WH Smith.

It has presence in 250 cities across the country.

Leading e-commerce major Amazon, which is looking to expand its presence in India, already has stake in Shoppers Stop and More.

If the deal is through, this would be the third investment by the US-based company in the Indian brick-and-mortar retail ecosystem.

Last year, retail major Shoppers Stop had announced raising Rs 1.79 billion from Amazon through an issue of equity shares on preferential basis. The deal with Amazon.com Investment Holdings LLC translated into just over 5 per cent shareholding for Amazon in Shoppers Stop.

In September this year, Amazon said it has co-invested in Witzig Advisory Services, the entity that is acquiring Aditya Birla Retail's 'more' chain of stores in India.

According to market watchers, this deal is expected to help Amazon strengthen its play in the Indian retail market that is still dominated by offline retailers.

The move would also intensify competition further between Amazon and Walmart-backed Flipkart that are locked in an intense battle for leadership in the Indian e-commerce market.

The US' largest retailer Walmart had picked up 77 per cent stake in Flipkart for USD 16 billion, the largest deal in the Indian e-commerce space so far.

Both Amazon and Flipkart are pumping in millions of dollars towards building infrastructure, and expanding operations in the country.