INDIA: Apple’s distributors in India are taking a hard line against the growing grey-market trade of the iPhone 17 series. Mainline retailers have received stern warnings not to activate newly sold iPhones with foreign SIM cards — a move insiders call the strictest yet. The alert comes at a time when iPhone 17s have almost vanished from Indian stores, leaving eager buyers frustrated.
Moneycontrol says a distributor notice warns of severe penalties, including the potential blocking of store codes, if any device is found activated using a foreign SIM card within 90 days of purchase. “All outlets are strictly prohibited from engaging in or facilitating such activities under any circumstances,” the notice emphasises.
The intensified enforcement follows Moneycontrol’s recent report that Apple is scaling back bank cashback offers on the iPhone 17 series, a move widely interpreted as an attempt to curb grey-market profiteering amid constrained supply.
Parallel exports worsen the shortage
Industry figures show that Apple exported $1.6 billion worth of iPhones in October alone — almost a third of India’s total smartphone exports. Analysts estimate that 3% to 5% of these exports move through unofficial channels, with about half ending up in Russia, where Apple no longer operates. Africa, the Middle East, and Southeast Asia are other lucrative destinations.
Retailers say high overseas demand is driving bulk diversion of India-made iPhone 17 units, especially the 256 GB and 512 GB models. While the base model costs ₹82,900 (S$1,212) in India, it fetches around ₹88,500 abroad, often bundled with accessories and benefiting from an 18% GST drawback — making the grey-market route extremely profitable.
“Even though production is happening locally, the iPhone 17 is in acute shortage,” one retailer said, noting that the distributor warnings have been circulating in major cities for nearly two weeks. Another added that both non-activated and India-activated phones are being exported due to the scarcity.
Sources familiar with Apple’s operations clarified that these directives usually come through distributor partners, not Apple itself. The grey-market issue isn’t unique to Apple — certain Samsung Galaxy devices are also quietly finding their way to non-priority markets.
Retailers and experts raise the alarm
Kailash Lakhyani, Founder Chairman of AIMRA and President of ORA, has raised alarm over large-scale diversion of iPhones meant for the Indian market, stating that “millions of phones are being exported every month.” He alleged that exporters and aggregators are exploiting cashback offers and GST refunds intended for local consumers, resulting in significant losses to banks and the government.
Lakhyani called on authorities to monitor IMEI activation data to expose the extent of the grey-market trade and, without directly naming Apple, questioned why the practice continues despite repeated warnings from the brand, implying possible complicity or lax enforcement.
Moneycontrol also said it found major stockouts across offline retailers and online marketplaces like Flipkart and Amazon. With global demand surging during Thanksgiving sales in the US and the upcoming Lunar New Year in China, Apple is expected to divert even more inventory to priority markets — leaving India’s shelves even emptier.
For Indian consumers, it’s a stark reminder: the grey-market export machine is colliding with official distribution strategies, and the fallout is being felt at the point of sale.
