Amazon would be investing about $500m (£392m) over the next five years to build up a network across India as New Delhi is set to give green light to the online retail major to deliver groceries.
Last year, India allowed foreign companies to sell groceries to consumers, with the processed foods being sourced locally.
"There is no problem with Amazon's proposal" to start selling groceries online, a commerce ministry official told the Wall Street Journal adding, "We will approve it this month."
Amazon has been looking to get into the grocery market in India for a while now. In March the company had sought clearance from India's trade ministry to invest $5bn to deliver local food products like fruit, vegetables and other things.
Amazon believes its billion-dollar investment could help modernise India's retail platform. The company has made rapid progress in India since its launch in 2013.
"We are excited by the government's continued efforts to encourage FDI in India for a stronger food-supply chain. We have sought an approval to invest and partner with the government in achieving this vision," said an Amazon spokeswoman.
Last February the company launched Amazon Now service for customers in Bangalore. Using the app customers can shop for their everyday essentials from local stores and other including BigBazar,Reliance, Fresh, Bharat Petroleum In & Out, Godrej Nature's Basket, Food World and have their products delivered within two hours or at a pre-scheduled time.