Apple ends distributor ties in India over unofficial iPhone export concerns

In a decisive move to combat unauthorized iPhone exports from India, Apple has severed ties with several distributors and implemented stricter compliance regulations across its retail network. This action is a response to a notable increase in grey-market shipments to destinations like Russia, Africa, and West Asia, as reported by Moneycontrol. Industry insiders indicate that India's competitive pricing has transformed it into a target for traders seeking higher profits overseas. According to sources, Apple has already terminated relationships with multiple distributors in regions including Punjab, Mumbai, Haryana, and parts of southern India, with more partnerships currently under scrutiny. As part of its efforts, the company has issued new directives to retailers, enforcing stricter in-store activation procedures to deter any diversion of products. Under the new protocol, devices must be unsealed, activated with a SIM card, and set up in-store before being given to customers, meaning buyers will no longer receive sealed iPhones at the point of sale. Retailers have been warned that violations of these new rules could result in immediate penalties, including a ban on future transactions. Additionally, Apple is closely monitoring transactions related to exports to further ensure compliance. The company is also revamping its billing and compliance protocols. From now on, sales of iPhones and iPads will be invoiced at maximum retail price, with retailer margins being issued through credit notes after a verification process based on activation data. Weekly settlements and reconciliation reports will also be put in place. This initiative builds on previous actions taken in November, during which distributors were urged to discourage the use of foreign SIM cards for activating new devices, particularly recent iPhone models, due to reports of supply shortages linked to bulk diversions. Government statistics for the first eleven months of FY26 reveal that iPhones made up over 75% of India's smartphone exports, contributing approximately Rs 2 trillion out of a total of around Rs 2.6 trillion in shipments. However, industry estimates suggest that 5-7% of these exports may be flowing through unofficial channels, with a significant portion heading to Russia and other international markets. In addition to tightening controls, Apple is shifting its focus towards larger retail partners, minimizing engagement with smaller retailers and shortening premium partner contracts from three years to just one.