Reliable suppliers in China exist in large numbers, and so do fake ones, and the difference is rarely visible on a website. A polished catalogue, a quick reply and a low price prove nothing. This guide is built on the Embassy of India in Beijing's advisory for Indian SMEs, which lists the problems Indian companies have reported and the checks the Embassy recommends, and on the Embassy's own verification page. It is guidance and not a guarantee, and the Embassy says it bears no responsibility for transactions between Indian and Chinese companies. The aim here is to turn its advice into a working routine: where to look, a ladder of checks, the red flags, the contract terms and a scorecard.
For what to do after you choose a supplier, see how to reduce risks when buying from overseas suppliers.
What Indian Companies Have Reported
The advisory lists the problems brought to the Embassy's attention. For purchases from Chinese companies they include:
- sub-standard goods, and sand, stones, salt, bricks or mud supplied in place of chemicals, metals or plastics;
- refusal to send goods after payment, and silence once an advance is received;
- quantity disputes and defective machinery;
- payments diverted to unassociated bank accounts after an email account was hacked;
- money taken for samples, followed by silence;
- price increases after a contract was signed; and
- failure to supply documents needed for customs clearance, such as the original bill of lading and pre-shipment inspection certificates.
The Embassy also observes that the majority of the trade disputes it sees involve companies registered in Shandong, Hebei, Guangdong, Jiangsu and Zhejiang, and advises extra precaution with companies from those provinces. That is a reason for extra checks, not a reason to rule out a province.
Where to Look
Good leads come from other importers, from visits to factories and from trade fairs where you can meet suppliers in person. The advisory adds that exporters or importers for a particular commodity can be reached by sending a trade query to the Embassy or to the Consulates General in Shanghai, Guangzhou and Hong Kong.
Be careful with online platforms. The advisory says to avoid transacting with any company from a B2B platform, noting that some such sites offer products at rates far below the market value, and its do's and don'ts include avoiding contracts with companies found through B2B platforms or social media. Treat a listing as a name to verify, never as proof.
The Verification Ladder
Climb every rung before you pay anything.
| Rung | What to do | Why |
|---|---|---|
| 1. Credential check | Write to the Embassy or the Consulates to verify the entity | The Embassy aims to respond in 4 to 5 working days, but its check is preliminary and based on open sources |
| 2. Business licence | Collect a copy valid for the business duration and ask the local Industrial and Commercial Bureau about the company | The advisory recommends this before signing a contract |
| 3. People | Keep copies of the identity card and passport of the proprietor and other responsible contacts | Recommended in the advisory |
| 4. Age and capital | Be extra careful with a newly established company with a small registered capital | The advisory says fraudsters can register small companies and that adverse records may appear slowly on the national enterprise credit system |
| 5. Business report | For a large transaction, consult a business service company for a report on transparency, finances, reputation and reliability | Recommended for large deals |
| 6. Dispute lists | Check the Embassy's list of Chinese entities in trade disputes with Indian companies | The list in the advisory runs from 2009 to July 2024 |
| 7. Site visit | For large transactions, visit and photograph the factory, and check that the products are made there and that the packages belong to the company | Recommended for large deals |
| 8. Bank account | Confirm that the account is the company's, not an individual's | Listed in the advisory's do's |
The Embassy's verification page adds that you may ask the Chinese company for business licence copies within the valid business duration, financial status certificates and ability certificates for the industry, attested by the Chinese Ministry of Foreign Affairs and the Indian Embassy, and that the Embassy's own check is only a preliminary credential check.
How to Ask for Proof
Ask early, politely and in writing, because a genuine supplier will expect to be checked. Say which documents you need and why: a copy of the business licence, identity copies for the people you deal with, the address of the factory, and the registered company name that will appear on the invoice and on the bank account. Explain that your bank and your customs broker will also need names and addresses that agree across the contract, the invoice and the payment. A supplier that answers quickly and completely has told you something useful. One that delays, changes the subject or offers a different company name at the last moment has told you something too.
Red Flags
The advisory describes patterns that recur in the cases it has seen. Treat any of these as a reason to stop and check:
- a price far below the market value;
- a request to bring cash or gifts before a visit;
- insistence on an advance, or on payment for samples, followed by silence;
- a request to pay a third party or an individual, or a late change of the bank account, especially when it arrives by email;
- a notarisation fee that rises after you have paid your share;
- a company address that cannot be traced and only temporary phone numbers; and
- unwillingness to name the clearance documents in the contract.
Samples and Small Orders Are Not Proof
One case in the advisory describes a supplier that wins trust with small initial orders and good samples, then delivers sub-standard goods against a larger order and stops communicating. The Embassy's advice is to treat each transaction on its own merit and to make no compromise on documentation or scrutiny even when earlier dealings went well. Use inspection, not goodwill, to confirm quality. Our guide to quality control inspection before shipping from China explains how.
What to Put in the Contract
The advisory's do's and don'ts translate into contract terms:
- Sign a proper contract before engaging in any business proposal.
- Include an arbitration clause. The advisory also suggests a clause for mediation overseen by the relevant China Council for the Promotion of International Trade body.
- Name the documents needed for customs clearance, such as the original bill of lading and any pre-shipment inspection certificate.
- Define force majeure, and cover cost escalation from unforeseen supply chain disruptions.
- Provide for verification of quality and quantity by an independent inspection agency before the balance is released.
- For high-value contracts, use a letter of credit, or an escrow or bank guarantee route. Do not pay an advance to a company whose credentials are unknown.
A Supplier Scorecard
A scorecard keeps the decision consistent. The criteria and weights below are illustrative, so set your own.
| Criterion | Illustrative weight |
|---|---|
| Identity and registration verified | 20 |
| Capacity confirmed, ideally by a visit | 20 |
| Quality evidence from an independent inspection | 20 |
| Commercial terms and payment protection | 15 |
| Documents and compliance, including export papers | 15 |
| Communication and responsiveness | 10 |
Score each supplier from zero to the weight, but treat identity and bank account checks as stop signs: a supplier that fails either is out, whatever its score.
A Supplier Due-Diligence Checklist
- The Embassy or a Consulate has been asked to check the entity.
- A business licence copy and the identity documents of the proprietor are on file.
- The company's age and registered capital have been reviewed.
- A report or a site visit supports any large order.
- The bank account is the company's, confirmed by more than an email.
- The contract names the clearance documents and the dispute route.
- The payment method protects you if the goods are wrong.
Source With Support From RR Brothers and Logistics
RR Brothers and Logistics is based in Guangzhou and ships from China to India by sea and air. Tell us where your supplier is and what you are buying, and we will explain how the cargo would move and which documents it needs. Verify your supplier first, and share its details with your forwarder early.
Frequently Asked Questions
Ask the Embassy of India or a Consulate to check the entity, collect the business licence and the identity documents of the proprietor, check the age and capital of the company, consider a business report or a site visit for large orders and confirm the bank account is the company's.
It does a preliminary credential check from open sources and aims to reply in 4 to 5 working days. It bears no responsibility for the information or for transactions, so combine it with your own checks.
The Embassy's advisory says to avoid transacting with any company from a B2B platform, because some sites offer products at much lower rates than the market value. Treat listings as leads to verify.
A copy of the business licence valid for the business duration, identity card and passport copies of the proprietor and key contacts, and, for large deals, financial status and ability certificates attested as the Embassy describes.
The advisory says not to pay any advance to a Chinese company whose credentials are unknown. If an advance is needed, use an escrow or bank guarantee route.
The advisory asks Indian companies to seek the Embassy's help in clear cases of cheating or trade disputes so that such companies can be entered in its database. Keep every record.
Sources
- Embassy of India, Beijing: Updated advisory for Indian SMEs doing business with Chinese companies
- Embassy of India, Beijing: Import/Export and Verification of Company
This article is general information, not legal, tax or customs advice. Rules, rates and procedures change; confirm current requirements with the relevant authority or a licensed customs professional before you ship. Regulatory references were checked against the official sources listed above on 26 October 2026.
Image credits: header photo by Vitaly Gariev on Unsplash; photo by Sam Moghadam on Unsplash. Used under the Unsplash License.
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