The Bloomberg report, citing one unnamed person with knowledge of the matter, added that billionaire Mukesh Ambani-led Reliance is willing to sell an up to 40% stake in the retail business to Amazon, according to BloombergQuint.
Shares in Reliance were up 4% in midday trading in Mumbai. The company earlier on Thursday became the first listed Indian firm to cross $200 billion in market capitalisation.
Amazon has held talks about investing in Reliance Retail and expressed interest in negotiating potential deals, according to the report.
The news follows a $1 billion investment announced Wednesday by Silver Lake Partners in Reliance Retail, which runs more than 10,000 stores selling apparel, groceries and electronics across India.
Amazon did not immediately respond to a Reuters request for comment. Reliance did not immediately return an email seeking comment.