China's e-commerce giant Alibaba is reportedly in talks to buy a stake in India's One97 Communications.

The price has been estimated at 550 million U.S. dollars.

One97 runs Paytm, an e-commerce platform which consumers can access through mobile apps.

The investment will be used to expand Paytm services, with a view to dominate the online payment business that is expected to grow rapidly in the next few years in India.

Under the deal, Alibaba, together with one of its units, will hold between 30 and 40 percent of One97 after the investment.

It will be Alibaba's first significant investment in India's rapidly growing online business segment.

India has the world's third-largest Internet user base, but e-commerce is still relatively underdeveloped.