Apple’s official distributors have warned Indian mobile phone retailers of heavy penalties if new iPhones, particularly the iPhone 17 series, are activated with foreign SIM cards within 90 days of purchase, according to MoneyControl.
This move aims to curb illegal diversion of phones to grey markets. Distributors informed retailers that any phone activated with a foreign SIM within this period could result in substantial fines, though the exact amount remains unspecified. Additionally, retailers’ store codes may be blocked under Apple’s policies.
The primary reason behind this step is to prevent the diversion of iPhones to high-profit international markets such as Russia, Africa, and the Middle East. The grey market activity has caused supply shortages in India, with many iPhone 17 models quickly depleting from stores. Retailers reportedly export large quantities of phones to overseas markets where profit margins are higher.
Experts estimate that 3-5% of total iPhone exports occur through unofficial channels, with nearly half sent to Russia, where Apple ceased operations after the Ukraine conflict. In October, Apple’s iPhone exports reached $1.6 billion, accounting for about one-third of India’s total smartphone exports.
This diversion has led to significant shortages, especially of the 256GB and 512GB iPhone 17 models. Apple has cut cashback offers from ₹6,000 to ₹1,000, making the phones more expensive for consumers.
Post-festive season, discounts were reduced, and both online and offline retailers like Flipkart and Amazon reported limited stock. Many stores have sold out or stock is very limited. While the official price in India is ₹82,900, export prices can reach ₹88,500 or higher, often including additional accessories worth ₹4,000-₹5,000.
Grey market diversion isn’t limited to Apple; several Samsung Galaxy models also face similar issues. Retailers argue that these rules are unfair, as small stores are targeted more than large retail chains.
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An anonymous retailer noted that both small sellers and online platforms carry out parallel exports. Apple CEO Tim Cook acknowledged supply constraints during recent earnings calls, citing strong demand for the iPhone 16 and 17. Supply is expected to improve by December, but shortages continue to impact the Indian market.
