Jabong website screengrab

E-commerce giant Amazon, which has been pushing aggressively in the Indian market, is now reportedly in talks to acquire fashion e-tail Jabong.

According to The Economic Times, sources revealed that Amazon was interested in acquiring the fashion portal to capture a larger market in selling fashion products.

While the sources have stated that a deal may not be imminent, discussions are underway, and Jabong is reportedly holding out for a valuation of about $700 million, much higher than the $500 value estimated by its investor group Rocket Internet in a regulatory filing.

The news comes close on the heels of Amazon's Jeff Bezos' visit to India, wherein he had talked about the scope of the fashion market in India. Fashion retail online makes the second biggest e-commerce category in India, making up about 25% of sales.

The deal, if finalized, could pose serious competition to the current market leader Myntra, which was acquired by Flipkart, and combined holds a market share of more than 50%. Jabong is still at 25%.

"After Myntra got acquired by Flipkart, Jabong is the ideal candidate," an insider told ET. "A big chunk of the $2 billion that Amazon founder Jeff Bezos has promised to invest in India is meant for acquisitions," he said.