Flipkart, India's largest e-commerce company, is set to buy Myntra.com, an online fashion retailer based in Bangalore, in a deal valued at nearly $330 million, according to local media reports Wednesday.

Acquiring Myntra could be a significant strategic move for Flipkart in its bid to expand market share in India's fast-growing online shopping segment, and the combined entity is expected to help the company take on Amazon.com Inc. (NASDAQ:AMZN), the American online retail giant, which launched its portal in India last June. 

“The battle now is clearly drawn up,” Deepak Srinath, director of corporate finance-technology at Allegro Capital Advisors, a Bangalore-based investment bank, told Mint, a local business newspaper. “Amazon has been very quick and aggressive and Flipkart needed this consolidation to stay ahead and stay relevant.”

Amazon currently sells 15 million products across 24 categories after only 11 months of doing business in India while Flipkart, which was founded in 2007, also has 15 million products across more than 70 categories, according to a report by Business Standard, a local newspaper.

The cash-and-stock deal is expected to be announced this week and is likely to value Myntra at about $330 million, Mint reported, adding that the proposed agreement was finalized in April, but both companies and their investors took time to develop a deal structure in compliance with Indian laws.

Sachin Bansal, CEO and co-founder of Bangalore-based Flipkart, had earlier reportedly said that the company would consider acquisitions whenever an opportunity became available. Mukesh Bansal, co-founder and CEO of Myntra, also had said that the company was open to strategic partnerships.

Once the deal is complete, it will be the first major consolidation in India's $2 billion e-commerce sector. The overall size of India's organized retail sector is estimated to be $40 billion, Business Standard reportedAccording to another estimate, by CLSA Asia-Pacific Markets, the Indian online retail market is currently valued at $3.1 billion and is expected to reach $22 billion by 2018.

India still prohibits foreign direct investment, or FDI, in e-commerce, while overseas companies such as Amazon and eBay Inc (NASDAQ:EBAY) operate online platforms to allow local third-party traders to sell their products.

Flipkart, which has so far raised $560 million in funding since its launch, is working to raise a fresh round of capital, Mint reported, citing a source. Officials at Flipkart and Myntra were not immediately available for comment.