Alibaba and its Alipay unit are in negotiations to acquire a 30 to 40 per cent stake in One97 Communications, the Indian owner of a leading m-commerce platform called Paytm,  according to Reuters.

This price would be about $550 million.

It would be the Chinese giant’s first foray into India, which has a small but fast-growing market in e-commerce, much of which is conducted via mobile phone.

The investment is expected to be officially announced by the end of January. Alibaba and Alipay will be issued with new shares, so diluting existing shareholders.

Existing shareholders include founder Vijay Shekhar Sharma, as well as Intel Capital, Saif Partners, Saama Capital and Sapphire Ventures.

One97 wants to use the funding to make Paytm the country’s largest digital goods and mobile commerce platform.

None of the parties involved would comment officially.

Reports last week named other possible suitors for One97, including Temasek and Amazon.