Amazon Pharmacy will make its debut in Bangalore and it may be trialled in other Indian cities.
The move comes as the online drugs business has been given a major boost during the coronavirus pandemic.
This year US technology giants have invested billions of dollars in the Indian economy.
In recent months India has seen billions of dollars of investment by US technology giants.
Earlier this year, Amazon's chief executive Jeff Bezos pledged to make major investments in India.
Speaking at a company event in New Delhi in January, he said the 21st Century is "going to be the Indian century".
Amazon has set ambitious plans for expansion in the world's largest democracy, where it has invested some $6.5bn (£5bn). Like rival US retailer Walmart, it sees major growth potential in the fast-growing economy.
In May, Amazon entered India's meal delivery business with a trial in four parts of Banglore.
Last month, Google became the latest big American player to invest in Indian conglomerate Reliance Industries' digital business.
The Alphabet-owned search engine agreed to pay $4.5bn for a 7.7% stake in Jio Platforms.
Reliance's billionaire owner Mukesh Ambani said the two companies would develop phones for 4G and 5G networks.
Also in July, Google said it would invest about $10bn in India over the next five to seven year, joining a list of new investors in Jio that includes Facebook, Intel and Qualcomm.
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