Richard,
I really like the way you have tried to explain things. I kept quiet for a day since I was busy and also I wish more of my brethren would participate in this discussion that affects their lives.

I will like to think that this thread would be an eye opener to all small developers who at times may not be aware of alternate channels of acquiring the device they need. See, the development cycle starts in university. You just get the devices to use in the lab or whatever. So, when you're out on your own, it is possible that the only source you know besides your lab is the retail shop.

If there are Indian folks reading this thread that can advise on how to take up these issues like customs duty being charged on duty free parts etc, I'd like to hear them.

To the best of my knowledge, Atmel has a distributor in Bombay who is very low key and is not well known. There is a price differential between the open market and their pricing too - theirs is higher.

There are many nuances to this issue and I cannot put many comments on air since they are in the public domain. In summary, the industry here will need to develop alternate channels for getting their goods so that these bad retailers get pinched. Its only then that they will realize who gives them their daily bread. I believe its more a systemic problem than of individuals.

Its nice to have the internet empowering us developers now. I remember the time around 10 years ago when I had to literally beg to get a datasheet for the Philips 3010 remote controller IC.
Times - they are a changing.

Jerson