India’s largest retailer, Pantaloon Retail, and French retail giant Carrefour are reportedly nearing an equity partnership agreement.

According to a report in India’s Business Standard, Carrefour is preparing to take a stake in Future Fashion Merchandise, a Pantaloon subsidy created following the restructuring of its retail operations.

Rules on foreign direct investment in India prohibit foreign companies from owning multi-brand retail outlets, forcing international conglomerates to forge partnerships with local retailers.

Carrefour has previously signalled its intention to set up a cash and carry wholesale chain in India, which is allowed under FDI regulations.