A foreign-currency account an Indian bank holds with a correspondent bank abroad, used to receive foreign-exchange inward remittances.
A Nostro account (from Latin nostro — "ours") is a foreign-currency account that an Indian bank maintains with a correspondent bank in the country of that currency. For an Indian AD Bank, a USD Nostro sits at a US bank, a GBP Nostro at a UK bank, and so on.
Nostro accounts are the plumbing that lets foreign-exchange inward remittances actually arrive at your Indian bank account.
The two-step routing explains why:
A Vostro account is the same concept from the correspondent bank's perspective: an INR account that the foreign bank holds with an Indian bank. When a US company pays an Indian supplier in INR, that money flows through a Vostro.
You never see the Nostro directly, but understanding it explains the timing of your Amazon settlement credits and the FX spread your bank applies. If you receive in foreign currency, ask your bank about opening an EEFC (Exchange Earners' Foreign Currency) account — lets you hold up to 100% of realizations in foreign currency, useful if you also have import obligations in the same currency.