* Takeda interested in Lupin's domestic formations, research -paper
* Takeda talks with Cipla in preliminary stages -paper
* Japan drugmakers active in overseas acquisitions (Adds background, share price)
MUMBAI/TOKYO, Aug 24 (Reuters) - Takeda Pharmaceutical Co , Japan's largest drugmaker, is in talks with Indian generic drugmakers Cipla and Lupin about buying one of the companies' pharmaceutical businesses, the Economic Times reported on Wednesday.
Takeda, which has said it wants to expand in India, one of the world's fastest growing drug markets, has held preliminary talks with Cipla, while talks with Lupin have progressed beyond the initial stage, the newspaper said citing people with direct knowledge of the development.
Japanese drugmakers, hampered by rising hurdles to develop next-generation blockbuster products, have been active in global acquisitions, seeking to beef up their product pipelines.
A Takeda spokeswoman declined to comment on the report. A Cipla spokeswoman said, "We would like to clarify that these reports are baseless and untrue and is categorically denied."
A representative for Lupin could not immediately be reached by Reuters. The report said a Lupin official declined to comment.
Cipla is known for selling low-cost generic versions of anti-retroviral drugs used to fight HIV/AIDS. Lupin is a major producer of generic drugs.
The newspaper report said Takeda was interested in buying Lupin's domestic formulations business as well as its research facility, but its founders were not willing to sell the research unit.
Emerging markets are set to become the main driver for the global pharmaceuticals industry as patents run out on many top drugs and sales in Western markets stall, but acquisitions in those economies have not always come easy.
In 2009, Daiichi Sankyo , Japan's No.3 drugmaker, took majority control of Indian generic drug maker Ranbaxy Laboratories for $4.6 billion, but later saw profits fall at the unit following a U.S. ban on some Ranbaxy products amid allegations of falsified data.
In a move to lift its presence in emerging markets, Takeda bought drugmaker Nycomed, which is well-placed in Russia and Brazil and owns a majority stake in a Chinese firm, for $13.7 billion.
At a news conference announcing the deal in May, Chief Executive Yasuchika Hasegawa said the Japan firm was open to further acquisitions.
In 2008, Takeda purchased U.S. cancer specialist Millennium Pharmaceuticals for $8.8 billion in 2008. Other Japanese drugmakers have also been active in overseas acquisitions.
In recent years, Astellas Pharma bought OSI Pharma for $4 billion and Eisai purchased MGI Pharma for $3.9 billion to boost their cancer drug pipelines.
Shares in Takeda ended at 3,625 yen on Tuesday, down 0.7 percent versus an 1.1 percent fall in the benchmark Nikkei stock average . (Writing by Sumeet Chatterjee; Reporting by James Topham in TOKYO and Kaustubh Kulkarni in MUMBAI; Editing by Malini Menon)