The war between  (AMZN) and Alibaba Group Holding (BABA) might have just escalated in India.

The Chinese e-commerce giant announced Thursday it took a controlling stake in India's Paytm E-Commerce with a $177 million investment, according to a regulatory filing by the Indian company. Singapore E-Commerce, one of Alibaba's 40 significant subsidiaries and consolidated entities, gained another 36.3% stake in Paytm E-Commerce, adding to the 40% stake it already holds with Ant Financial Services Group, Alibaba's finance arm. Alongside Alibaba, Hong Kong-based venture capital firm SAIF Partners also picked up a 4.7% stake in Paytm E-Commerce by investing $23 million.

"It is a very logical and strategic investment and a deeper commitment in this space. Alibaba's strategy is to expand its footprint and minimize its country risk. China is still its core market but it has slowed," said Santosh Rao, head of research at Manhattan Venture Research.

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"The Indian e-commerce market is at the cusp of a major boom, in step with the growing penetration of cellular phones. The online payments companies are going to be a major beneficiary of the ecommerce boom, led by Paytm," added Rao.

Founded in 2010, Paytm is an Indian mobile payment and e-commerce company. It is also the consumer brand of mobile internet company One 97 Communications, in which Alibaba and its associates are also the largest shareholders. As a whole Paytm is valued at $4.8 billion after raising $60 million in August last year, according to an Indian tech news site.

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