Paying an Indian Supplier Safely: T/T, Letters of Credit and Basic Checks
How to verify a supplier, pay to the right account and choose between T/T and a letter of credit.
Payment is the point where an export deal can go wrong. A few habits protect both buyer and supplier, whether you pay by telegraphic transfer or letter of credit.
1. Verify the supplier first
Check the company's registration, tax number and address, and ask for references or past customers. An Indian exporter normally holds an Importer-Exporter Code, so ask for it.
2. Pay only to the company account
The bank account on the proforma invoice should be in the company's legal name. Be cautious about requests to pay a personal account or to change bank details by email. Confirm any change by phone using a number you already trust.
3. Choose the payment method for the relationship
Telegraphic transfer (T/T) is fast and simple and suits repeat business. A letter of credit (L/C) adds a bank guarantee and suits larger first orders, though it adds cost and paperwork.
- T/T: bank transfer, simple, common for repeat orders
- L/C: bank-backed, suits new relationships and larger orders
4. Put terms in writing
Agree the price, Incoterm, payment schedule, delivery date and documents in the proforma invoice or contract. Written terms prevent most disputes.
5. Start with a trial order
A smaller first order lets you check quality, packing and service before you commit to a larger one.
Key Takeaways
- Verify the supplier
- Pay only to the company's account
- Pick T/T or L/C to suit the order
- Agree terms in writing and start small
This article is general guidance. For a recommendation for your own application, contact our engineering team. Send an export enquiry →