India’s SMEs told to be careful while doing business in China

New Delhi: The Indian Embassy in Beijing has issued an advisory asking Indian small and medium enterprises (SMEs) to take certain precautions before doing any business with Chinese companies in China.

The advisory states that these precautions are needed as the Embassy has regularly come across several problems faced by Indian companies doing business with Chinese entities in China.

The advisory recommends that before doing business with any Chinese entity, Indian companies write to the Indian Embassy (com.beijing@mea. gov.in) or Indian Consulates in Shanghai (hoc.shanghai @mea.gov.in), Guangzhou (com.guangzhou@mea.gov.in), and Hong Kong (commerce. hongkong@mea.gov.in) to verify the credentials of the entity. The respective mission will respond in 4-5 working days.

In cases of large transactions, it is highly recommended that Indian companies consult a business service company that can provide a report on the business transparency, financial health, reputation, reliability, and credentials of the Chinese entity, the advisory further states.

The advisory also recommends that before doing business with any Chinese entity, Indian companies collect and retain copies of both the Resident Identity Card (Chinese Identity Number) and passport of the proprietor and other responsible interlocutor(s) of the Chinese entity.

The embassy has observed that the majority of the trade dispute cases involve companies registered in Shandong, Hebei, Guangdong, Jiangsu, and Zhejiang provinces. Therefore, Indian companies are advised to take extra precautions before trading with companies from these provinces.

The advisory that has been posted by the Indian Embassy on X also has some annexure documents that businesses need to look at.

Annexure 1 contains a list of typical problems that Indian companies face. It also contains a checklist of precautions that Indian companies are advised to take while dealing with Chinese entities. Annexure 2 contains descriptive accounts of typical modus operandi adopted by offending Chinese entities, while Annexure 3 contains a list of Chinese entities involved in trade disputes with Indian companies from 2009 to April 2024. (IANS)

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