Indian Firms Advised Caution in Deals with Chinese Companies

01 Aug, 2024

Indian Firms Advised Caution in Deals with Chinese Companies

The Indian embassy in Beijing has issued an advisory urging Indian small and medium enterprises (SMEs) to exercise caution when engaging in business with Chinese firms. This advisory is in response to frequent issues faced by Indian companies in their dealings with Chinese entities.

Indian businesses are advised to contact the Indian Embassy or Consulates in Shanghai, Guangzhou, and Hong Kong to verify the credentials of any Chinese business entity before initiating transactions. The embassy promises a response within 4-5 working days. For significant transactions, consulting a Business Service Company for a report on the transparency, financial health, and reputation of the Chinese company is highly recommended.

Additionally, the advisory suggests that Indian companies should collect and retain copies of the Resident Identity Card (Chinese Identity Number) and passport of key individuals from the Chinese entity. The embassy has noted that most trade disputes involve companies from Shandong, Hebei, Guangdong, Jiangsu, and Zhejiang provinces, and advises extra caution when dealing with firms from these regions.

The advisory, posted on X, includes annexure documents that provide further guidance for businesses.