India’s rapidly growing grey-market exports of the iPhone 17 have triggered a strong response from Apple’s distributor network. In an unprecedented move, distributors have issued formal warnings to mainline retailers, instructing them not to activate newly sold iPhones with foreign SIM cards—an action closely tied to parallel exports.

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Exports Surge as Domestic Supplies Shrink Retailers Push Back: “We Are Not the Problem”Industry Leaders Raise Alarms Over Massive Losses

The issue has escalated just as iPhone 17 models virtually disappeared from Indian shelves, with widespread supply shortage worsened by bulk diversion of units to high-profit markets in Russia, Africa, the Middle East, and Southeast Asia.

Retailers Told to Stop Foreign SIM Activations

According to the communication reviewed by Moneycontrol, distributors have cautioned retailers that:

“If any device sold from your outlet is found activated with a foreign SIM within 90 days, a high penalty will be imposed, and the store code may be blocked.”

Retailers were told this message should be treated as an official warning, with strict instructions not to support or engage in any activity linked to parallel exports.

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Exports Surge as Domestic Supplies Shrink

Industry estimates show that Apple’s iPhone exports hit USD 1.6 billion in October, accounting for nearly one-third of India’s entire smartphone exports.

Experts believe 3–5 percent of these exports are non-official or grey-market shipments. Nearly half of these diverted units reportedly head to Russia, where demand has surged since Apple halted official operations after the Ukraine conflict.

Important: Experts say the rising scale of unofficial iPhone exports is now significantly disrupting domestic retail availability.

Retailers Push Back: “We Are Not the Problem”

Mainline retailers argue the crackdown unfairly targets them when multiple channels—including online platforms—play a role in parallel exports.

One retailer said the new warning does not apply to large-format retail chains or to distributors themselves, despite the problem being far more widespread.

Another retailer highlighted the financial incentive behind exports. While the India price of the iPhone 17 is Rs 82,900, exporters fetch around Rs 88,500, often bundling accessories to boost margins.

“iPhone 17 is in acute shortage despite being made in India,” the retailer said, adding that the distributor messages were circulated across major cities in the last 10–12 days.

Industry Leaders Raise Alarms Over Massive Losses

Kailash Lakhyani, Chairman of AIMRA and President of ORA, said the scale of unofficial exports is causing significant financial losses to banks and the government.

He explained that exporters illegally claim full bank cashback benefits along with 18% GST drawbacks, even on already-activated phones.

He urged authorities to examine IMEI activation data, which he believes would immediately expose the diversion network.

iPhone 17 Shortage Deepens Across India

A retail check by Moneycontrol confirmed that the iPhone 17 base model, especially the 256GB and 512GB variants, is in extremely short supply across offline stores and major e-commerce platforms such as Amazon and Flipkart.

The shortage has intensified after Apple began reducing bank cashbacks for the iPhone 17 series. With demand spiking globally ahead of Thanksgiving in the US and Lunar New Year spending in China, Apple is reportedly diverting more inventory to these key international markets.

This diversion is further squeezing domestic availability, making the Indian market more dependent on unofficial trade routes to meet rising demand.

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