Thanks to high-cost customs stamps imposed through legal channels, many iPods and Macs are smuggled into India and sold through gray market channels, where they sell on the street for much less than authorized Apple dealers charge. For example, according to Wired News's Scott Carney, a 30GB iPod can be purchased for US$280, $20 less than the U.S. price but $160 less than the Indian price.

"My landlord is just one of millions of Indians who have a taste for all things Apple," Mr. Carney explains as he relates the story of his landlord asking for a MacBook in exchange for several months worth of rent. He lives in Chennai, an Indian city with many shops that cater to such tastes, thanks to the "huge loads of illegal iPods and MacBooks [smuggled in] from Singapore, Dubai, and Malaysia."

"There is basically no incentive to buy legal," Dina Mehta, a Mumbai-based blogger and marketing consultant, told Mr. Carney. "They are launched officially late, and are often more expensive than what you find in the U.S., Singapore or Dubai."

While Apple wouldn't comment on the situation, Mr. Carney speculated: "Since added costs go to the government, not Apple, it may well be in Apple's best interest to look the other way and let smugglers drive up the company's sales numbers." He quoted industry estimates suggesting that 60 to 90% of iPod sales in India are likely gray market.

"The fact that iPods are unaffordable makes them iconic," Rashmi Bansal, editor of Jam magazine, told Mr. Carney. The journalist noted that when he attended a recent party with "other members of Chennai's glitterati, there wasn't a Windows machine in the house."

Thanks to Ars Technica for the link.