The software giant will be entrusted with the task of developing a program to evaluate the performance of umpires in every domestic match, Indian cricket board vice-president Lalit Modi said on Sunday.
"We zeroed in on Microsoft after looking at several technological solutions," said Modi. "The deal is not finalised yet, but we are in the final stages of negotiations."
Officials have been stung by criticism from the International Cricket Council (ICC) that Indian umpires were not up to international standards.
No Indian has figured in the ICC's elite panel of umpires that supervises Test cricket around the world since former captain Srinivas Venkataraghvan retired in 2003.
The Indian board will record all domestic matches with six cameras and the footage will be analysed by the software to be developed by Microsoft, Modi said.