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Old 20-09-07   #1
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Parallel Imports - An interesting read


Not sure which section to post this in...admin/mods please do the needful

This is quite an interesting read about parallel imports in India:
The gray factor

When buying a product, a buyer looks for lowest prices, good post-sales services and also, geniune products.
As long as all these criteria are met, does it really matter whether the dealer, who is selling the product has sourced it from an authorized Indian distributor or has bought it from the gray market? In all likelihood, your answer will be 'no'.
Do vendors have any right to refuse support for a product merely because it has not been sourced through the authorized channel partner of that geography?
Pavan Duggal, an advocate with the Supreme Court of India, informed that a manufacturer cannot deny services to genuine products on the ground that it has been purchased from any other territory. He further stated that any individual or dealer can file a case against that company in the court for deficiency of service on authorized product and even seek Rs 1 crore as compensation.
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Old 20-09-07   #2
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Re: Parallel Imports - An interesting read

Does that mean that we can souce our graphics card (like XFX), HDD...... from outside India and get service in India as well....
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Old 20-09-07   #3
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Re: Parallel Imports - An interesting read

Very happy to see the legal aspect.

It again proofs - Supreme Court of India Rocks
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Old 20-09-07   #4
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Re: Parallel Imports - An interesting read

eventually logic should prevail and thats exactly the fundamental basis of the SCI's viewpoint.
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Old 20-09-07   #5
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Re: Parallel Imports - An interesting read

all we need is a EVGA service centre in India...and we are done....
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Old 20-09-07   #6
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Re: Parallel Imports - An interesting read

Nice article thanks for the heads-up KMD...

@kooabs03: In theory maybe, but we all know the kind of stranglehold Indian distis have on the market. That's how they are able to get away with charging exorbitant premiums for items like graphic cards. Every XFX product is sold with a sticker... "3 years warranty through Rashi".. I don't know if other countries have this practice..

Seraph defended this move and said, "By this circular we just want to let our partners know that there are elements in the market who are indulging in smuggling and selling the material in the market. This is not beneficial for the resellers who are thinking of a long-term business with us."
Poor choice of words from Seraph. What if an importer buys from an authorized source overseas? Are they immediately branded as smugglers?? It is obvious that manufacturers and distis are working hand-in-hand in this nexus.

But alas, I am happy to see such forward thinking by the SC.

Last edited by imoen; 20-09-07 at 01:07 PM.
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Old 20-09-07   #7
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Re: Parallel Imports - An interesting read

I'm not a lawyer, but common sense would dictate that if a person is independently importing items
  1. paying for imports through proper channels (ie, not havala etc.)
  2. bearing the cost of import duty, freight, etc.
then how can the parent company refuse to honor warranties as long as the product is genuine?

I think the main reason for this attitude by the "official importers/distributors" is price fixing. They want to milk the customers for all they can get. One only has to look at price difference of some hardware in India and abroad to see the huge margins some of the official resellers have even while keeping import duties, taxes etc. in mind.

However not all companies are charging huge margins vis-a-vis foreign pricing. Some are pricing items reasonably and by doing so, they automatically make imports by independent resellers redundant and non viable. After all, people are in this to make money - not charity. If local pricing is such that it makes independent imports unattractive then no one will import items independently. The reason people are importing items independently is because of the huge difference in foreign and domestic pricing.

I can see several arguments from "official importers" though none really hold true imo.
  1. Argument no. 1 - Support (read warranties).
    They may argue that they charge extra due to "support reasons" (ie. honor warranties). This does not hold imo, as the "cost/overhead" for the warranty is always included in the price of the product regardless of whether it is sold in India or abroad. In other words, the manufacturer *has* already received the associated overhead price to honor the warranty on the product when it was sold to a distributor abroad and therefore has no reason or grounds to deny it locally. Thats my view anyway though I could be wrong.
  2. Argument no. 2 - Dealership costs
    In all likelihood, "official distributor" have to pay some amount of money (maybe even a large amount) to obtain distribution rights to begin with. This charge is automatically passed on to us - the consumers. Why should we have to bear the brunt for this? The only condition where this would seem somewhat logical is if the distributors were also responsible for warranties. I dont think this is the case as I have always heard that you have to go to the "official service centers" for warranties. I would assume that these service centers are run/supported by the manufacturers rather than by the distributors. If this is so, then this argument doesnt hold either.
  3. Argument no. 3 - Advertising and promotional costs
    "Official distributors" may incur advertising and promotional costs which are again passed on to us the customers. I would however be inclined to believe that such costs are in fact borne by the manufacturer and not the distributor though a distributor may well do some promotion on their own.
The more I think of this, I feel this "denial of service" attitude specifically with regard to honoring warranties on the part of the manufacturer on items imported independently and legally by individuals possibly violates the MRTP act or some other Indian law. I would be quite surprised if it didnt....

Last edited by rickyk; 20-09-07 at 01:15 PM.
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Old 20-09-07   #8
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Re: Parallel Imports - An interesting read

^^^ very well put @rickyk...
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Old 20-09-07   #9
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Re: Parallel Imports - An interesting read

Pawan Duggal is a very big laywer , attended a lecture of his in college once , and if he says u can sue for as much as 1 cr , then get products let them deny the warranty and sue :-) . as far as the legal matter thou concerned in my opnion ( i am still a buddin laywer dont flame upon me ) , then the product we are getting in from any other part of the world should carry a international warranty also , no matter we are paying the duty or not :-) and then i think we should be able to claim warranty . because if we buy a product with just warranty in that one region of the world and its stated on their bill , or manual or anything then i think we become bound by it kinds .

Last edited by 200mph; 20-09-07 at 10:35 PM.
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Old 20-09-07   #10
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Re: Parallel Imports - An interesting read

Originally Posted by 200mph View Post
Pawan Duggal is a very big laywer , attended a lecture of his in college once , and if he says u can sue for as much as 1 cr , then get products let them deny the warranty and sue :-) . as far as the legal matter thou concerned in my opnion ( i am still a buddin laywer dont flame upon me ) , then the product we are getting in from any other part of the world should carry a international warranty also , no matter we are paying the duty or not :-) and then i think we should be able to claim warranty . because if we buy a product with just warranty in that one region of the world and its stated on their bill , or manual or anything then i think we become bound by it kinds .

Are there any judgments supporting his statement or is it just an opinion (opium) of Mr. Duggal

I wonder if Mr. Duggal will take a case, and then take 80% of the claim received as his fees? ( i am willing to settle for 20% even 10% or even 5%). I seriously doubt it.

Bottom line is you can sue for 10cr even, but how successfully, that is another Question.

You want better warranty and pricing - then stop whinning and stand up for yourself. How many of you have asked why life time warranty in US or europe and only 3 yrs or less in India? Have you questioned your supplier in detail, have you told him to go back to his disty and ask him that. Or how many have asked this Qs in a direct meeting with the manufacturers.

The list is long, but do we do anything about it, or we just rest on our back sides and say "what can I do?".

PS: Apple upheld the warranty on ipod bought in "Singapore" without any bill, Sure they asked for it, and all I said, there is no bill, check your serial number for the warranty - and if you cannot uphold the warranty, give it to me in writing, I will take it up with Apple HO. took all of 2 mins to accept it under a warranty claim. btw the iPod was bought Kasi chetty street - Chennai
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Old 21-09-07   #11
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Re: Parallel Imports - An interesting read

wow that is so nice
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Re: Parallel Imports - An interesting read

You guys have actually summed it up. If the company has its own official warranty center, then the warranty can not be denied. But thats exactly where the gray area is. Companies like MSI, ASUS, XFX, Etc. etc. etc. do not have 'their own' warranty centers in India. So you have to rely on the distributor, now the distributor has all the rights to deny the warranty if the product wasn't sold by him.
So, 1st you find out if the the company has an official warranty center in India and then buy the product.
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Re: Parallel Imports - An interesting read

On digging again, I found out that the 'NEXT' - sabse sasta electronics, is also based on this principle. This is the reason why they had a huge row with Hitachi a few years ago, Hitachi went ahead and published a news paper ads, claiming that that 'NEXT' sold Hitachi goods were not authorized and Hitachi has nothing to do with 'NEXT' (as the official vendors blamed HITACHI for the parallel import) . There also a lawsuit, what happened to it, that I dont know, but 'NEXT' stands strong, and keeps on doing what it did best - 'Sell at competitive prices'.
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Re: Parallel Imports - An interesting read

Well....i had a similar experience with an Xbox360 purchased from Malaysia that went bad in 9 months. I called up Microsoft India and they accepted my complaint and agreed to fix it free of cost since the product was under warranty.

The only catch was that since the unit was an NTSC (JAP) unit, i had to ship it to either Japan or Australia at my cost. The repair / replacement would be shipped to me in India FOC.

I finally gave it to a local guy for fixing......and will pay the 6.5k fixing charge.

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Old 24-09-07   #15
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Re: Parallel Imports - An interesting read

Originally Posted by thebanik View Post
all we need is a EVGA service centre in India...and we are done....
Very well put.

Imagine if EVGA were to open a service center here.

All your "KMD" cards suddently gained a lot more value when selling at other forums where "local indian warranty" carries a lot of weight age.
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