Apple's distributors have issued a stern warning to Indian mobile retailers, particularly concerning the iPhone 17 series, over the use of foreign SIM cards within 90 days of purchase. According to a communication reviewed by MoneyControl, distributors have threatened hefty penalties for any device activated with a foreign SIM within this window. The warning states that retailers may face high fines and the potential blocking of their store codes if caught violating the policy.
This crackdown comes as the iPhone 17 models—especially the base 256GB and 512GB variants—virtually disappear from Indian shelves. These devices are being diverted to high-margin markets, including Russia, Africa, and the Middle East. Sources estimate that 3-5% of total iPhone exports are being shipped through non-official channels, with almost half of these devices heading to Russia, where Apple had suspended operations following the Ukraine war.
Industry insiders believe that these grey market diversions have led to acute supply shortages in India. Retailers are struggling to keep up with demand, and Apple recently reduced bank cashback offers on the iPhone 17 series from ₹6,000 to just ₹1,000, citing supply constraints.
The diversion of iPhone 17 units to international markets is creating a serious scarcity in India. While the official price of the iPhone 17 in India is ₹82,900, the export price is around ₹88,500—higher than the maximum retail price (MRP). These export units are often bundled with accessories worth an additional ₹4,000-₹5,000, making them even more attractive to overseas buyers.
Apple's reduced cashback offer reflects the ongoing supply issues, with the company having to scale back on incentives in response to the tight inventory.
Many retailers feel the brunt of this crackdown. They argue that the mandate unfairly targets them while large-format stores and distributors seem to be exempt from the strict penalties. “The parallel export issue is not just a mainline retailer issue. It involves all channels, including online stores,” one retailer, who wished to remain anonymous, told MoneyControl.
Kailash Lakhyani, president of the All India Mobile Retailers Association, also raised concerns about the fiscal impact. He stated that millions of phones are being exported each month, which misallocates fiscal benefits meant for domestic consumers. This diversion leads to losses in cashback claims and GST drawbacks, which negatively affect retailers’ bottom lines.
Apple CEO Tim Cook recently addressed the supply issues during the company’s earnings call. He acknowledged the shortages of iPhone 16 and 17 models, driven by strong demand and constrained supply. However, Cook reassured investors that the situation would stabilise by December, with supply chains expected to catch up with demand soon.