Neighborhood stores dot tens of thousands of cities, towns and villages in India. They have survived — and thrived, despite — retail giants’ billions of investment in the country. So now, Amazon is beginning to embrace them.

Amazon said on Saturday it has partnered with thousands of neighborhood stores — locally known as kirana stores — across India to use them as delivery points for goods.

The company said it’s a win-win scenario for all stakeholders. “It’s good for...

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