US retail giant Walmart is exploring the possibility of setting up retail stores in India, while in talks to buy a stake in online marketplace Flipkart.

Among the investment negotiations with Flipkart there is a proposal to open a chain of retail stores, the Economic Times has said.

This proposal could be a win-win for both groups. Walmart currently runs wholesale operations in India but is not permitted to open retail stores in the country because of restrictions on overseas investments in multi-brand retail.

Flipkart, meanwhile, has been on the lookout to buy retail chains to take on US rival Amazon.

While Walmart is negotiating to buy a stake of more than 30% in Flipkart, it is likely to face objections from its key investor Softbank, which currently holds 20.8% in the Bangalore-based online retail firm, the daily noted.