Parul
The Indian Embassy in Beijing has issued a crucial advisory, urging Indian small and medium enterprises (SMEs) to take specific precautions before engaging in business with Chinese companies. This advisory comes in response to recurring problems encountered by Indian firms operating within China.
The advisory emphasizes the importance of verifying the credentials of any Chinese entity before commencing business activities. Indian companies are advised to contact the Indian Embassy (com.beijing@mea.gov.in, ccom.beijing@mea.gov.in) or the Indian Consulates in Shanghai (hoc.shanghai@mea.gov.in), Guangzhou (com.guangzhou@mea.gov.in), and Hong Kong (commerce.hongkong@mea.gov.in). The respective missions promise to respond within 4-5 working days.
For large transactions, the advisory strongly recommends consulting a Business Service Company. Such companies can provide detailed reports on the business transparency, financial health, reputation, reliability, and credentials of the Chinese entity in question.
Moreover, the advisory highlights the necessity of collecting and retaining copies of the Resident Identity Card (Chinese Identity Number) and passport of the proprietor and other responsible interlocutors of the Chinese entity before proceeding with any business engagements.
A particular note of caution is issued regarding companies registered in the provinces of Shandong, Hebei, Guangdong, Jiangsu, and Zhejiang. The embassy has observed that most trade disputes involve companies from these regions. Therefore, Indian businesses are advised to exercise heightened vigilance when dealing with entities from these provinces.
The advisory, which has been posted on the Indian embassy’s social media account on X, includes several annexure documents essential for businesses to review. Annexure 1 lists typical problems faced by Indian companies and provides a checklist of precautions to take while dealing with Chinese entities. Annexure 2 offers descriptive accounts of the common modus operandi adopted by offending Chinese entities. Annexure 3 includes a comprehensive list of Chinese entities involved in trade disputes with Indian companies from 2009 to April 2024.
The Indian Embassy’s advisory aims to protect Indian SMEs from potential pitfalls and ensure that they are well-informed and prepared before entering the Chinese market.
