Foreign Buyer Red Flags: 15 Warning Signs Before You Ship

Verified as on 19 October 2026 against the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (RBI Notification No. FEMA 23(R)/2026-RB of 13 January 2026, as amended on 22 September 2026), RBI A.P. (DIR Series) Circular No. 20 of 16 January 2026, Chapter 8 of the Foreign Trade Policy 2023 (FTP) and the Handbook of Procedures 2023 (HBP) of the Directorate General of Foreign Trade (DGFT), two policy documents of ECGC Limited (ECGC, the Government of India enterprise that insures export payments), the Indian Cybercrime Coordination Centre (I4C) reporting page and Press Information Bureau (PIB) release 2025648 of 16 June 2024. Written by Pratham Agarwal, Founder, Rasp International.

Why we wrote this

Most export fraud does not start with a fake company. It starts with a real deal and one message that changes who pays, where the money goes or where the goods go. A credit report cannot see that message. Our guide to the five checks on a new overseas buyer looks at the buyer’s record. This post looks at the buyer’s messages.

The loss usually stays with the exporter: ECGC’s Multi-Buyer Exposure Policy in Foreign Currency excludes losses from “hacking, masquerading, eavesdropping, phishing, cloning, etc. broadly known as Cyber Risks”. Rasp International has served 500+ exporters since 2019. The signs below are the ones you can spot in an inbox before the container leaves.

What a buyer red flag is

A buyer red flag is a request or change in a buyer’s messages or order that does not fit the deal you signed, and that should stop or change the shipment until you confirm it through a channel the buyer did not choose. One red flag does not prove fraud. It tells you to stop and check.

A call back is a check in which you phone the buyer on a number you already hold, from a signed contract, a registry record or an earlier call you placed. It is never a number given in the message that asked for the change.

Business email compromise is a fraud in which someone reads a real email thread and then sends one message, usually about bank details, from the hacked account or a lookalike address. The thread is genuine. Only that message is false.

15 warning signs and what to do about each

The table runs in order: first contact, the order, the payment, then the documents. “Regulation” means the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, made under Sections 7 and 8 of FEMA. Where no official rule exists, the source column says so.

What a credit report catches and what only the messages show

A credit report and a registry check tell you whether the company is real and how it has paid others. They say nothing about the email that arrives after the order. You need both.

What most people get wrong

“ECGC will pay if I am cheated.” ECGC’s Multi-Buyer Exposure Policy in Foreign Currency lists among its exclusions “Any losses arising due to occurrence of events such as hacking, masquerading, eavesdropping, phishing, cloning, etc. broadly known as Cyber Risks.” Each ECGC policy has its own wording, so check the exclusions in your own policy with your ECGC branch.

“A SWIFT copy means the money is in.” Regulation 4(2) says a bank shall credit an exporter’s account “only after having satisfied itself of the genuineness of the transaction”. Until your bank credits you, you hold a picture, not a payment.

“The RBI master direction still sets the rules.” RBI A.P. (DIR Series) Circular No. 20 of 16 January 2026 says the Master Direction on Export of Goods and Services “shall stand superseded” from 1 October 2026. For third party payments, paragraph A.3(v) of the old direction asked for a firm irrevocable order backed by a tripartite agreement, with some exceptions. Regulation 8 now leaves it to the bank’s view of the bonafides.

Where two official documents do not match. On 19 October 2026 the Master Direction page on rbi.org.in still reads “Updated as on July 17, 2026” with no note that it is superseded, and many guides still quote its paragraph numbers. Read the 2026 Regulations instead, with your bank’s own export policy, which Regulation 19(4) requires every Authorised Dealer bank to publish on its website.

The realisation period moved twice. RBI Notification No. FEMA 23(R)/(7)/2025-RB of 13 November 2025 raised it from nine to fifteen months, and Notification No. FEMA 23(R)/(8)/2026-RB of 5 June 2026 took it back to nine. Regulation 5(1)(a) now gives nine months from the date of shipment. For a shipment made while fifteen months applied, check with your bank which period it applies.

When a sign means stop and when it can be cleared

Stop at once, and hold the goods and documents, for any of these:

• A change of bank details by email, until a call back on a known number confirms it.
• Any fee asked of you before an order exists.
• A refund of an overpayment before your bank confirms the credit is final.
• An LC that did not reach you through your own bank.
• A request to state a lower value or a different description of goods.
• A request to send original documents outside the bank on a documents against payment deal.

These are not red flags by themselves. Clear them, keep the paper and carry on:

• Payment from a named group company, with the reason in writing and your bank’s approval under Regulation 8.
• An invoice in Indian rupees settled through a Special Rupee Vostro Account (a rupee account a foreign bank keeps with an Indian bank), where Regulation 5 allows twelve months to realise.
• A buyer who gives you its own courier account number for samples, once the courier confirms the account.
• A long standing buyer that changes its bank by signed letter, confirmed on a call you placed.

Edge cases, with the rule that applies

The goods are at sea when the warning sign appears

Keep the original documents with your bank. The ECGC Shipments (Comprehensive Risks) Policy do’s ask you to minimise loss through safe custody in a bonded warehouse or an alternate buyer, and its don’ts need ECGC’s prior approval for a resale when the loss exceeds 25% of the gross invoice value. Under Regulation 6, your bank may allow a lower realisation if it is satisfied with your reasons.

The buyer’s parent company pays from another country

This can be normal. Regulation 8 lets your bank permit the receipt if it is satisfied with the bonafides, so give it the reason in writing before shipment. RBI Circular No. 20 of 16 January 2026 tells banks to inform any doubtful transaction to the Directorate of Enforcement, so explain early.

The buyer overpaid by a genuine mistake

Refund through the bank that received the money. Regulation 10(1) asks you to route an advance and the export realisation through the same Authorised Dealer bank unless you tell both banks of a change. Never refund to an account named only in an email.

An existing buyer has not paid for an earlier shipment

The ECGC Shipments (Comprehensive Risks) Policy don’ts bar further shipments, without ECGC’s prior approval, to a buyer whose earlier payments remain unpaid after the original due date. Regulation 13 adds that if money stays unrealised beyond one year from the due date, your further exports go only against full advance or an irrevocable LC.

What to do when a sign appears

1. Before any order: fix the payment route on paper. Put your bank details and the buyer’s payer in the signed contract, with one line: bank details never change by email.
2. Before any order: save one verified number. Take it from a signed contract, a registry record or a call you placed, not from an email signature.
3. Before shipment: check the buyer with ECGC. The ECGC do’s ask you to confirm the buyer is not on ECGC’s list of buyers with adverse experience and to hold a credit limit on it.
4. When a sign appears: stop, hold and call back. Release no goods, no original documents and no refund. Call the saved number and confirm any change in writing from a known address.
5. When a sign appears: tell your bank. Under Regulations 4(2) and 8, the bank judges whether a receipt is genuine, so it needs the facts before the money moves.
6. If money is lost: report at once. Use 1930 or cybercrime.gov.in, the routes the I4C names for financial cyber fraud. The Chakshu facility of the Department of Telecommunications on Sanchar Saathi takes reports of suspected fraud calls, SMS or WhatsApp messages within 30 days.
7. If payment is overdue: tell ECGC. The ECGC do’s ask for the overdue report by the 15th of every month for payments overdue more than 30 days.
8. If the buyer will not pay or settle: file a trade dispute. HBP 2023 paragraph 8.03 sets the online route on dgft.gov.in under Services, Quality Complaints and Trade Disputes, and FTP 2023 paragraph 8.04(c) asks the committee to resolve it preferably within three months.

The lapse rule. Regulation 5(1)(a) gives nine months from shipment to realise the export value, and your bank may extend it on request. Past one year from the due date, Regulation 13 limits you to full advance or an irrevocable LC. Claim time limits differ by ECGC policy, so check with your ECGC branch.

The fast track. None exists for buyer fraud. The 1930 helpline is the reporting route the I4C names, and it cannot promise recovery.

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Five groups and the sign each should watch

1. First-time exporters answering a portal enquiry. Watch for fee-first requests and webmail buyers. See the mistakes first-time exporters make, and use overseas buyer research to find importers with a shipping record.
2. Handicraft, home decor and textile exporters. Watch the sample request with an urgent courier on your account, and any agent fee. Our post on agents who ask for fees in advance shows the same pitch at home.
3. Food and farm exporters on documents against payment. Watch requests to send original documents direct and late consignee changes.
4. Engineering exporters paid by LC. Watch LCs sent as PDFs and clauses only the buyer can satisfy.
5. Exporters with ECGC cover. Check every buyer against ECGC’s adverse list and remember the cyber risks exclusion. Uttar Pradesh (UP) exporters who claim part of the premium back under Government Order 830/18-4-2025 of 6 November 2025 need a real and valid export transaction: see UP’s refund of part of the ECGC premium and trade finance and ECGC cover. UP exporters should also read our post on which ECGC policies count for the UP premium subsidy. Gulf shippers can read our post on RELIEF Component II, which DGFT Notification 37/2026-27 extended to 31 March 2027.

Illustrative composite: the bank change that one phone call stopped

This is an illustrative composite with round example numbers. It is not a client case.

An exporter of brass home decor agrees an order of 40,000 US dollars (USD) with a buyer it has shipped to twice before: 30% advance, balance against a scanned copy of the bill of lading. The advance of USD 12,000 arrives through the exporter’s bank. The signed contract carries one line: “Our bank details will never change by email. Before you pay any new account, call us on the number printed in this contract.”

Day 1: the container sails and the exporter emails the invoice and the copy bill of lading. Day 2: the buyer’s accounts team gets a second email in the same thread, with the exporter’s signature and logo, from a domain that differs by one letter. It says the Indian account is “under annual audit” and asks for the USD 28,000 balance to go to an account in a third country.

Day 3: the buyer’s accounts manager follows the contract line and calls the office number printed in the signed contract, not the one in the new email. The exporter confirms nothing has changed. Within the hour it writes to the buyer from its known address with the original bank details, tells its bank, checks its mailbox for forwarding rules, resets passwords and reports the attempt on cybercrime.gov.in. Day 6: the bank credits the USD 28,000 balance.

Without the call, the buyer pays USD 28,000 into the new account and believes it has paid. The exporter is not paid, the nine month clock under Regulation 5(1)(a) keeps running and the ECGC policy quoted above excludes cyber risks. The point of no return is the moment the buyer’s bank sends the money. After that, recovery depends on banks and police in two countries.

How Rasp International helps

Rasp International is an ISO 9001:2015 certified export advisory firm, founded in 2019, that has served 500+ exporters since 2019. We sign an NDA (non-disclosure agreement) and an SLA (service level agreement) with every client, so the buyer messages, contracts and bank papers you share sit under a signed confidentiality term. Where we file anything for you, we file on your behalf in your unit’s name, and we give an authority letter only when you ask. You and we both hold the portal logins, kept safe and confidential.

We run foreign buyer checks for clients, place Dun and Bradstreet (D&B) orders through the National Small Industries Corporation (NSIC) and file DGFT trade dispute applications in the unit’s name when a buyer will not pay or settle. Our post on the D-U-N-S number for Indian exporters explains the NSIC route for D&B products. A buyer check lowers the risk, and we make no promise that a buyer will pay or that a dispute will be settled.

We hold no customs broker licence: licensed customs broker partners across India handle customs clearance. Read how we work as a consultant, not an agent.

Honest limits

• These signs cannot prove fraud. A genuine buyer can trip one. They tell you when to stop and check, not who is at fault.
• A call back fails if the number came from the fraudster. It works only with a number you saved before the request arrived.
• No official body repays a fraud loss as of right. The ECGC policy quoted here excludes cyber risks, the DGFT committee only conciliates under FTP 2023 paragraph 8.05 and the 1930 helpline cannot promise recovery.

What Is Not Yet Notified, Checked on 19 October 2026

• RBI has published no guidance on how banks will judge “bonafides” for third party receipts under Regulation 8. Check with your bank and read its published export policy.
• ECGC says its list of buyers with adverse experience is on its website for policyholders, behind a login. Check with your ECGC branch for access.
• Whether your own ECGC policy carries the same cyber risks exclusion as the Multi-Buyer Exposure Policy in Foreign Currency. Check with your ECGC branch.
• FTP 2023 paragraph 8.07(d) says Indian Missions send information on foreign entities found malafide to DGFT for circulation to Export Promotion Councils, Commodity Boards and ECGC. We found no public list on dgft.gov.in. Check with your Export Promotion Council.

Frequently asked questions

How can I tell if a foreign buyer is fake?

Look for a mismatch. The email domain differs from the company’s website, the contact is not on the registry record, the first order is large and urgent or the buyer asks you for a fee. Then run a registry and credit report check before you quote terms, and ship first orders on secure terms.

What should I do if a buyer changes bank details by email?

Change nothing until you call the buyer on a number you already hold, from a signed contract or a registry record, not from the email. Confirm the change in writing from a known address and tell your bank. If money has already gone, report it on 1930 or cybercrime.gov.in at once.

Is it safe to accept export payment from a third party?

It can be lawful, but only your bank can allow it. Under Regulation 8 of the 2026 export and import regulations, a bank may permit third party receipts if it is satisfied with the bonafides. Get the reason in writing, name the payer in the contract and tell your bank before you ship.

What should I do if a buyer overpays and asks for a refund?

Refund nothing until your bank confirms the incoming money is final. Overpayment fraud works because the first credit is reversed after you refund. A genuine refund goes back only through your bank, under its published policy on advance receipts, and never to a new account named in an email.

How do I check if a letter of credit is genuine?

A genuine letter of credit reaches you through your own bank, which acts as the advising bank and checks the message. A PDF sent by the buyer is not an LC until your bank confirms it. Ask the bank to read every clause, especially any clause that only the buyer can satisfy.

Should I pay a registration fee to become a buyer’s supplier?

No. A genuine buyer does not charge a supplier to sell to it. A vendor fee, an import permit charge or a certificate sold by the buyer’s agent before any order is advance fee fraud. The same goes for a courier agent asking you to pay duty on samples into a private account.

Is a SWIFT copy proof that the buyer has paid?

No. A SWIFT copy is a picture of a payment message, and it can be edited or the payment recalled. Under Regulation 4(2) of the 2026 regulations, your bank credits export money only after it is satisfied the transaction is genuine. Release goods and documents after the credit, not after the copy.

Can a buyer change the consignee or port after the order is agreed?

Yes, but treat it as a new deal. Check the new party as you would a new buyer, amend the contract in writing and ask ECGC whether your cover still applies. The ECGC Shipments (Comprehensive Risks) Policy do’s need specific approval before any shipment to a Restricted Cover Country.

Does ECGC cover losses from email fraud?

Not under the policy we read. ECGC’s Multi-Buyer Exposure Policy in Foreign Currency excludes losses from hacking, masquerading, eavesdropping, phishing, cloning and similar cyber risks. Other ECGC policies carry their own wording, so check the exclusions in your own policy with your ECGC branch before you rely on it.

Where do I report an export payment fraud in India?

Report money lost from an Indian account on the 1930 helpline or on cybercrime.gov.in, run by the Indian Cybercrime Coordination Centre, and tell your bank at once. For a buyer who does not pay or supply, file a trade dispute on dgft.gov.in under Services, Quality Complaints and Trade Disputes.

Is the export realisation period still nine months?

Yes. Regulation 5(1)(a) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, in force from 1 October 2026, gives nine months from the date of shipment for goods. Exports invoiced or settled in Indian rupees get twelve months. Your bank can extend the period on request.

What happens if I ship and the money never arrives?

Your bank follows up the open shipping bill and can extend time, or allow a lower realisation, if it is satisfied with your reasons. If money stays unrealised beyond one year from the due date, Regulation 13 says your further exports go only against full advance or an irrevocable letter of credit.

Can DGFT help if a foreign buyer does not pay?

DGFT can conciliate. FTP 2023 paragraph 8.01(c) covers non-payment as unethical commercial dealing. Under paragraph 8.04(c), the committee in the DGFT regional office aims to resolve complaints preferably within three months. Complaints against foreign firms go through Indian Missions abroad, and legal action stays open to you.

What if a buyer asks me to show a lower value on the invoice?

Refuse. Rule 11 of the Foreign Trade (Regulation) Rules, 1993, quoted in FTP 2023 paragraph 8.02(a), requires you to state the true value, quality and description on the shipping bill. A buyer who wants a false invoice to save duty at home is also a buyer you cannot rely on.

Do I need a consultant to check a foreign buyer?

No. Every check in this post can be done by the exporter: a call back, a bank check of the payment or the LC, an ECGC list check and a registry check. A consultant helps when you lack the time or the paper trail, but no consultant can promise that a buyer will pay.

Your checklist for this week

• Add one line to your proforma invoice and contract: bank details never change by email, and any change is confirmed by a call to the number printed there.
• Save a verified phone number for each active buyer, from a signed contract or a registry record, not from an email signature.
• Download your bank’s export policy from its website, which Regulation 19(4) requires it to publish, and read the parts on advances and third party receipts.
• Ask your ECGC branch for access to its list of buyers with adverse experience and check your next three buyers on it.

Sources

1. Tier 1. Reserve Bank of India, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification No. FEMA 23(R)/2026-RB dated 13 January 2026, in force from 1 October 2026, amended by Notification No. FEMA 23(R)/(1)/2026-RB dated 22 September 2026, Regulations 3, 4, 5, 6, 8, 10, 13 and 19: rbi.org.in.
2. Tier 1. RBI A.P. (DIR Series) Circular No. 20 (RBI/2025-26/194) dated 16 January 2026, Export and Import of Goods and Services: rbi.org.in.
3. Tier 1. RBI Master Direction, Export of Goods and Services (updated as on 17 July 2026), superseded from 1 October 2026, cited for paragraph A.3(v) and the realisation period history only: rbi.org.in.
4. Tier 1. RBI Notification No. FEMA 23(R)/(7)/2025-RB dated 13 November 2025: rbi.org.in; Notification No. FEMA 23(R)/(8)/2026-RB dated 5 June 2026: rbi.org.in.
5. Tier 1. DGFT, Foreign Trade Policy 2023, Chapter 8, Quality Complaints and Trade Disputes, paragraphs 8.01, 8.02, 8.04, 8.05 and 8.07: content.dgft.gov.in.
6. Tier 1. DGFT, Handbook of Procedures 2023, Chapter 8, paragraphs 8.01 and 8.03: content.dgft.gov.in.
7. Tier 1. ECGC Limited, Shipments (Comprehensive Risks) Policy, do’s and don’ts: main.ecgc.in.
8. Tier 1. ECGC Limited, Multi-Buyer Exposure Policy in Foreign Currency, policy document UIN IRDAN124CP0001V01201819, exclusions D and S: main.ecgc.in.
9. Tier 1. Indian Cybercrime Coordination Centre, Ministry of Home Affairs, National Cybercrime Reporting Portal and the 1930 helpline: i4c.mha.gov.in; reporting portal: cybercrime.gov.in.
10. Tier 1. CBIC campaign against frauds committed in the name of Indian Customs, PIB release 2025648 dated 16 June 2024: pib.gov.in.
11. Tier 1. Department of Telecommunications, Sanchar Saathi, Chakshu suspected fraud communication reporting: sancharsaathi.gov.in.
12. Tier 1. Government of Uttar Pradesh, Government Order 830/18-4-2025 dated 6 November 2025, Export Credit Insurance Support Scheme (original order in Hindi, read in full).

This is general guidance. Rules change. Check the current notification or order, or speak to us, before you act.

Related: New overseas buyer: 5 checks before your first shipment | Export agent or consultant: 5 checks before you pay anyone | Trade finance and ECGC cover