(Reuters) - Prime Minister Narendra Modi's government could allow foreign direct investment in India's e-commerce sector as early as next month, paving the way for global online retailers such as Amazon to expand their business, four people with knowledge of the matter told Reuters.

A more robust online retail sector will spur manufacturing and help an economic revival, said the people, who are privy to discussions within the new government. An announcement is expected in next month's budget.

India currently bans global online retailers from selling goods directly to customers but allows them to own 100 percent of a marketplace business, where third-party suppliers can use their platform. Both Amazon and eBay use such a platform to operate in the country.

When asked about the decision, a spokesman for India's commerce and industry ministry declined to comment.

(Reporting by Nandita Bose and Rajesh Kumar Singh; Editing by Douglas Busvine andMiral Fahmy)