@nofrills: I imagine you made sure the font you used actually supported said glyphs

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I don't know the extent to which they're used in indic, and I do know some complex diacritics and ligatures won't work on the kindle software, but simple ones should. I can confirm that the more or less sole one still used in modern french (oe => œ) does work fine, provided the file is correctly encoded in UTF-8, and the font supports the glyph.
EDIT: Okay, from what I can tell, it's using multi-glyphs ligatures, which is precisely what's not supported on the Kindle (no real complex text layout engine), whereas my dumb exemple is a single-glyph ligature.
On the other hand, the K3 browser *should* handle such scripts, but that doesn't help you much ;D.