Amazon India has secured government approval to stock and sell food and groceries.

Sources say the American online retail giant plans to invest US$500 million in the food segment, over and above the $5 billion it has already committed to India, Reuters reports.

Currently Amazon India offers food products via Amazon Pantry, which has a line-up of retailers including its JV Cloudtail. It also offers same-day grocery delivery on its Amazon Now app through a tie-up with Indian retailers Big Bazaar, Hypercity and Star Bazaar.

Meanwhile, local venture-funded Flipkart, whose backers include Microsoft, Tencent Holdings and Tiger Global, also plans to move into the groceries space.