What is the "grey market" in Indian textiles? How does it affect wholesale buyers?

In Indian textiles, the term "grey market" is used in two different senses — and understanding both is important:

Meaning 1 — Grey fabric (technical term): Raw, unprocessed woven fabric before dyeing, printing, or finishing. This is NOT the "black market" — it is a legitimate, formal stage of textile production. (See the separate Q&A on grey fabric.)

Meaning 2 — Informal economy / tax-avoidance trade: The "grey market" in the black market sense refers to textile goods traded without proper GST invoices — cash-only transactions where tax is not collected or paid. This is different from the technical grey fabric.

Risks of buying from informal (no-GST) textile sellers:

• No Input Tax Credit benefit for GST-registered buyers
• No formal recourse if goods are defective
• Compliance risk — regulators can question unaccounted purchases
• Prices may appear cheaper but tax savings for the seller may result in compromised quality or traceability