Apple ends distributor ties in India over unofficial iPhone export concerns

Apple has stepped up efforts to curb unauthorised exports of iPhones from India, ending ties with multiple distributors and tightening compliance rules across its retail network. The move comes amid a rise in grey-market shipments from India to regions such as Russia, Africa and West Asia, according to a Moneycontrol report

The report quoted industry executives who said India’s relatively competitive pricing has made it a sourcing hub for traders looking for higher-margin sales in overseas markets. Sources said Apple has already terminated several distributors in Punjab, Mumbai, Haryana and parts of southern India, while more partners are under review.

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Stricter checks at retail stores

Distributors have also sent new instructions to retailers, making in-store activation rules stricter to prevent diversion. Under the revised process, devices must be unsealed, activated with a SIM card and set up at the store before they are handed over to customers. For buyers, this means iPhones may no longer be given in sealed condition at the point of sale.

Retailers have been warned of immediate penalties for violations, including being blocked from further business. The report further highlighted that transactions linked to exports are being actively monitored.

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New billing rules and partner changes

Apple has also introduced new billing and compliance measures. Sales of iPhones and iPads will now be invoiced at maximum retail price, while retailer margins will be released through credit notes after verification based on activation data. Settlements will be done weekly, along with reconciliation reports.

These steps build on an earlier round of action launched in November, when distributors discouraged the use of foreign SIM cards to activate newly bought devices, especially recent iPhone models, after reports of supply shortages linked to bulk diversion.

Government data for the first 11 months of FY26 showed that iPhones accounted for more than 75% of India’s smartphone exports, contributing about Rs 2 trillion out of total shipments of around Rs 2.6 trillion. Industry estimates suggest 5-7% of these exports may move through unofficial channels, with a significant share going to Russia and other overseas markets. Alongside tighter controls, Apple is also favouring larger retail partners, reducing engagement with smaller retailers and cutting premium partner contracts to about one year from three years.