In telecommunications business, a white route is a route where

both source and destination are legal termination. This is opposed

to a black route, which is a route that is illegal in both ends. Also
common in telecom (especially VoIP) is the term grey route,
which defines a route that is legal for one country or the party on
one end, but illegal on the alternative end.
An example of the white/grey/black trichotomy is often seen in
telecom routes from the USA to India. In India, a telecom
monopoly is granted to a few large corporations. Hence, all legal
("white") telecom traffic to the country is subject to the rates
imposed by these corporations. To overcome this restriction for
the purpose of achieving lower costs for consumers, and to make a
profit in the process, many small parties set up VoIP routers in
homes and offices around India. Telecom traffic from the Foreign
Countries like USA, UK is sent to these VoIP routers via IP and
terminated to the local Indian PSTN. This process is illegal in
India ("black"), but completely lawful in the USA ("white"). A
route like this, white on one end and black on the other is said to
be "grey".
SIM boxes
A "SIM box" is an unofficial voice over IP gateway which uses
multiple mobile telephones and SIM cards for PSTN connectivity,
while connecting to the Internet by conventional means. These
are normally operated clandestinely in third-world calling
destinations as the "black" end of a "grey route" where
conventional private branch exchange lines (such as T-carrier
primary rate interface) are not available to VoIP operators due to
a hostile local regulatory environment.
In India, for instance, an Internet Service Licensee is not
permitted to have PSTN/PLMN connectivity as voice
communication to and from a telephone connected to
PSTN/PLMN and following E.164 numbering is prohibited in
India.[1] By using licensing restrictions and regulations to ensure
that the interconnection between the PSTN/PLMN network and
Internet is not permitted, the government in India delivers a
lucrative monopoly to International Long Distance (ILD) service
providers licensed under Section 4 of the Indian Telegraph Act as
the only carriers officially allowed to carry international long
distance traffic into India.

The word “Illegal” itself gives one a hint. Basically a telephone

exchange through which no revenue is earned by the government
and one which hasn’t been authorised by the government is an
illegal telephone exchange.
The illegal operation can be carried out by bypassing the
International Subscriber Dialling (ISD) network to re-route calls
by using the Internet.
Setting up an illegal telephone exchange is easy, it just requires,
Sim Cards Routers, MDN ports and Ethernet. Using the above-
mentioned equipment ISD calls can be converted to local calls,
bypassing the government-authorised entities, BSNL and VSNL.
These illegal exchanges also pose a threat to national security as
these avenues are not availed by normal citizens for daily,
mundane conversations.