Points to note when doing business with Indians

The Indian market is huge, but Indian buyers have many issues. Feedback from numerous domestic traders largely boils down to: Indian buyers have low credibility, bargain aggressively, take small advantages, and are unhygienic. Everyone finds doing business with Indians very annoying; they have a lot of tricky questions and are very difficult to deal with. Many even treat inquiries from India as spam. However, this is ultimately inappropriate. After all, when doing business, one should always seize even a slim chance. Especially with the development of the Indian economy, trade between China and India will only increase in the future. As long as we strictly adhere to international rules, enhance our risk awareness, and avoid insecure payment methods, we can do business with India. After all, as one of the world's major developing economies, India's market potential is enormous.

According to customs data, India's main imported products from China include: electromechanical products, including electronic components for TVs, computers, audio equipment, machinery, etc.; coke and coal; raw silk and textiles, pharmaceuticals, steel, chemical and dye intermediates, refractory materials, light industrial products, and legumes. China's main imported goods from India include: iron ore, chrome ore, refined oil, steel, vegetable oil, alumina, electromechanical products, diamonds and gemstones.

Especially for enterprises newly engaging in foreign trade, the following points should be noted when trading with India:  

1. When quoting, add a small margin for them to bargain down, and you can offer a progressive price based on different quantities to make them feel they benefit from ordering more. Try to do CIF, as Indian customers are particularly troublesome and have many demands, so doing CIF allows you to collect more payment and better control shipping schedules. For those exasperating traders who constantly ask for prices but never pay attention to product details, maintain a standard reply; you can even create a reply template. Do not fully believe those who boast about their strength and large order volumes; it's advisable to investigate their company's status. As for the order volume, the actual number will only be known after they truly place an order; otherwise, treat it as a theoretical value.

2. Adhere to the internationally common trade practice of using sight Letter of Credit (L/C) as the primary payment method. Carefully review and fulfill the L/C, ensuring document consistency and conformity. Strictly execute according to L/C terms to prevent opportunistic criminals. Do not trust the buyer's sweet talk and various excuses; insist on not engaging in transactions with D/P (Documents Against Payment) at sight or usance, or D/A (Documents Against Acceptance) payment methods. This is because the local market is constantly changing, and import policies are frequently adjusted, meaning some importers, especially small and medium-sized commercial companies, might default on contracts at any time for various reasons.

As the saying goes: 'Goods die upon arrival.' As importers hold the initiative, several Chinese companies have suffered economic losses in the past two years due to D/P and D/A transactions. Some illicit importers, upon goods arrival, refuse to redeem documents and take delivery for various reasons, using this to coerce exporting companies, unreasonably forcing Chinese companies to repeatedly lower prices and change payment terms to D/A, thereby achieving the goal of buying goods at extremely low prices or even completely seizing them.

3. Special attention is required for deals concluded through intermediaries in Hong Kong and Singapore, especially shell companies established by Indians in these two locations. Some issue L/Cs in Hong Kong, with goods delivered to Hong Kong and then transshipped to India; others issue L/Cs in Hong Kong, with the delivery destination being India; some involve intermediaries contacting, and the final Indian user issues the L/C. In all such situations, it is crucial to investigate the basic information and creditworthiness of the intermediary, clarify responsibilities, and proceed according to prescribed legal procedures. In recent years, there have been numerous instances of trade disputes, claims, and even violations of Indian import laws and regulations in transactions conducted through the above methods, due to intermediaries manipulating the process.  

4. Pay attention to market research, consider the overall situation, meticulously set prices, and strictly quote externally. Do not engage in low-price dumping merely to expand the market or secure customers. In recent years, the Indian government has continuously initiated anti-dumping investigations against foreign goods exported to India. Many Chinese goods exported to India have withdrawn from the Indian market because the exporting companies did not actively respond to investigations. In the future, should any anti-dumping investigation cases arise again, relevant export enterprises should actively participate in and cooperate with the responses organized by relevant chambers of commerce.

5. After goods arrive at the destination, returns are permissible if the importer fails to pay or take delivery, or if there are quality issues. The exporter must, with the original importer's no-goods certificate, relevant pick-up vouchers, and the importer's request for return correspondence, entrust the shipping agent to handle the return procedures after paying reasonable fees such as port storage and agency fees. If the importer is unwilling to provide the exporter with a no-goods certificate, the exporter may, based on the importer's refusal to pay or take delivery correspondence, or correspondence from the bank or shipping agent indicating the importer's failure to pay and redeem documents, relevant pick-up vouchers, and the seller's request for goods to be returned, entrust the shipping agent to directly submit a return request to the relevant Indian port customs and handle the relevant procedures. If goods are cleared by the importer from customs and need to be returned due to quality issues, the import duties already paid by the importer can also be refunded, though only 80%-90% of the original duties paid.

In recent years, a few illicit importers often deceive Chinese exporters with lies such as customs not allowing pick-up, customs confiscating and auctioning imported goods, and customs not refunding import duties. This must draw our high attention. When handling return procedures, exporters should ensure to process the relevant procedures promptly within the storage period stipulated by Indian customs at the port customs warehouse. Indian customs regulations state that goods can be stored in the customs warehouse for 30 days. After 30 days, customs will issue a pick-up notice to the importer. If the importer cannot take delivery on time for some reason, they can apply for an extension with customs as needed. If the importer still fails to clear customs and take delivery within the extended period, customs will issue a second (and final) reminder for pick-up to the importer. If the importer, after receiving the second notice from customs, still does not take delivery within the stipulated time, nor provides any explanation or applies for an extension, customs will auction the goods concerned.

6. Strengthen communication with the Economic and Commercial Counselor's Office of the Chinese Embassy in India and the Economic and Commercial Office of the Chinese Consulate General in Mumbai. After a trade dispute occurs, export enterprises should truthfully inform relevant Chinese overseas agencies about the entire trade process, to facilitate situation analysis, propose suggestions, and assist domestic enterprises in resolving issues as quickly as possible.
In summary, Chinese exporters should still carefully understand the creditworthiness of Indian businesses and proceed with caution when trading with them.

India Market Summary:  

India is a major country for agency trade. Shortcuts to entering the Indian market:

1. Attend annual meetings of various associations in the Indian market, and find the annual meeting of your respective industry experiential event.

2. Participate in relevant and suitable exhibitions experiential event.

3. Remember, Indians value personal relationships the most. For everything, there is PLAN A and PLAN B (they say one thing and do another).

4. Among physical strength, perseverance, and spirit, Indians value spirit the most, so speak in a way that makes them comfortable.

Indian principles for purchasing goods: items should look good, quality can be average. When quoting prices for goods to India, we should consider the stability of the Indian currency and generally quote higher, for example: original quote 1 yuan, we should quote 1.3 yuan. Their VAT: raw materials, semi-finished products, finished products are 0%, 50%, 100% respectively. When quoting, we need to distinguish whether they are wholesalers or distributors. Wholesalers generally require fewer styles and higher prices, while distributors require more styles and lower prices.

5. To investigate whether Indians are genuine agents, directly investigate their sub-agents. Generally, they have 5 years of qualifications. If they are not in a hurry for us to ship after payment, it's because they are waiting for their downstream partners to bear the VAT.

6. Doing business with Indians:

（ 1) Build relationships, first ask: are you theboss. If not, the success rate of this business is not high.

（ 2) Help buyers understand that the supplier's price has reached the bottom line, and buyers will handle it fairly.

（ 3) Be prepared to spend ample time discussing with them.

7. Indian purchasing principles: Prices are quoted based on customer level: staff, senior, boss get 10% off, 20% off, 30% off respectively. (Remember, knowing an Indian Zoroastrian is equivalent to knowing 10,000 Indians)

8. Communicate in their native language, which is more cordial and helps build rapport.