India's K Raheja Group, which owns the Shopper's Stop retail chain, has reportedly emerged as the frontrunner in the race to partner US coffee shop giant Starbucks in its entry into India.

According to The Times of India, advanced talks between the two companies are underway, and a deal is expected to be agreed soon.

Foreign direct investment (FDI) is not permitted in the Indian retail sector, and so Starbucks is looking to partner a local firm in order to make its move into the country.

"The deal between the two parties, if formalised, will be based on a short-term franchisee partnership, at least till the time FDI in retail is permitted in the country. Once FDI is allowed, Starbucks could rework its association with the Rahejas," The Times of India quoted sources as saying.