Products purchased at Apple Store in India cannot be refunded or exchanged

It depends on the circumstances, but in the UK and most of Europe, consumer rights are much stronger than in some other parts of the world.

Here in the UK, the basic rule is that the vendor who sold a product to a private individual is on the hook for anything that goes wrong -- that is, they can't just pass the buck to a manufacturer under warranty or some other fall guy, they have to deal with the problem or be held responsible. Whether the vendor can in turn recover any losses from the manufacturer or reseller who supplied them is then that vendor's problem, not the end customer's.

Usually if a product is defective, the next step will be to repair, replace or refund. The legal position tends to be based on both sides being reasonable. For example, if you have a product that fails earlier than you might reasonably expect but still after a couple of years of use, you might get a refund for part of the original purchase price but you probably wouldn't be entitled to all of it. On the other hand, if a product fails in the first few months and the vendor can't repair or replace it, you're probably entitled to a full refund and there is a presumption that the product was defective unless the vendor can prove otherwise. In some cases, rights to a partial refund might last as long as 6 years, if the product purchased might reasonably be expected to last that long but that one didn't.

Several other shenanigans that vendors try to pull elsewhere also don't hold up here. You can't rely on dubious arbitration terms in sale contracts to override statutory consumer rights. A vendor also must not mislead consumers over their rights, for example putting up a sign saying "no refunds" when the buyer might have a legal right to a refund for a defective product. In fact, it's actually illegal for merchants to mislead in that kind of way, which is why you'll see often notices up at the tills that say something like "your statutory rights are not affected" to make it clear that they're not trying to illegally misrepresent anything about those rights.

This is all in addition to any more generous policy a merchant might voluntarily offer or any warranty a manufacturer might offer on its products regardless of where someone buys them.

I worked at a startup catering to Indian consumers. It was a typical transactional product coupled with offers. The time and energy we spent on fighting different kinds of abuse was outright insane. The fraudsters would come up with a new trick each week to abuse offers. No matter what check we placed (based on e-mail, phone number, IP etc., etc.,) they would beat it.

Based on my experience I can think of a few contributing factors.

1. Indian population. Lot of businesses underestimate this. They are used to reason in terms of %. But when you have a population of 1300 the % could still be within a threshold but absolute number would be larger than entire nations.

2. Outright incompetent cyber policing. The Indian consumers getting access to cheaper smartphone and internet exploded in the 2nd half of last decade. Naturally the country's police have just been unable to scale up to deal with new age crimes.

3. Poverty. It's super lucrative for young poor people to take advantage of arbitrage opportunities and abuse goodwill policies. The return policy is a good example. E-commerce companies in India are riddled with fraudulent return of goods. The modus operandi is simple enough. Order a smart phone, return a faulty/old one of the same model, sell the new one. Profit.

4. Extreme levels of corruption and vast geography. There are some well known cybercrime hotspot PIN codes but chasing the fraudsters is mostly futile. The police are mostly lethargic and more often than not are happy to work with the criminals to collect a weekly payment. It's more lucrative that way, why kill the golden goose?

5. Cheap internet, cheaper SIM connection. The country is awash with cheap bandwidth and SIM connection. To an extent you'll find new SIM packets lying on the sidewalk. This makes it extremely hard to tackle online frauds.

Or is this that there are small groups of very organized individuals abusing it and ruining it for the rest of the country?

Almost. It does not apply to custom-made products. Apple resellers consider BTO models to be custom-made and thus not eligible for this protection. But at least they warn you upfront.