The board of Snapdeal parent Jasper Infotech has agreed to the offer, and the proposal will be presented to Snapdeal shareholders in as soon as two weeks, a source told the Nikkei Asian Review on Wednesday.

"The deal is progressing ahead and it will be put forward to all shareholders now," the source said.

Flipkart and Snapdeal declined to comment.

Nikkei reported previously that Snapdeal's top shareholder, Japan's SoftBank Group, had broadly agreed to the combination of market leader Flipkart with No. 3 player Snapdeal and was in talks with Flipkart investors Microsoft, eBay and Tencent Holdings.

However, billionaire Azim Premji, whose investment company PremjiInvest is a minority shareholder in Snapdeal, has raised questions about the merger. The Economic Times reported that PremjiInvest had written to Snapdeal seeking clarity on how minority shareholder rights would be protected in the deal. The company also reached out to U.S.-based BlackRock and Singapore's Temasek Holdings to oppose any special payments to shareholders, including venture capital firms Nexus Ventures and Kalaari Capital, and founders Kunal Bahl and Rohit Bansal.

Business tycoon Ratan Tata is also an investor in Snapdeal.

Flipkart and Snapdeal -- founded in 2007 and 2010, respectively -- have been fighting hard to keep U.S.-based Amazon at bay. Snapdeal has been bleeding red ink and the consolidation was seen as a natural step forward.

Although growth in India's e-commerce industry has been slowing recently, global payments company Worldpay predicted in December that the country will overtake the U.S. as the world's second-largest e-commerce market behind China within 20 years. The Indian market is seen growing at a 28% annual clip from 2016 to 2020.