Before signing with an Indian agricultural exporter, verify the supplier's legal and export identity, check relevant APEDA registration where applicable, define the product specification and acceptable quality tolerances, agree on the Certificate of Analysis and inspection process, select the correct Incoterm, document payment terms and required shipping documents, and establish governing law and a clear dispute-resolution process.
Choosing an Indian agricultural exporter should involve more than comparing price, minimum order quantity and shipment time.
Before signing a purchase contract or transferring funds, an international buyer should verify the exporter, define the exact product specification, agree on quality evidence, clarify inspection rights and document who carries cost and risk at each stage of the shipment.
The purpose of agricultural exporter due diligence is not to make every transaction unnecessarily complicated. It is to remove ambiguity before money, goods and documents begin moving across borders.
1. Can You Verify the Exporter's IEC and Business Identity?
Start with the identity of the company that will appear on the contract, commercial invoice and export documents.
India's Directorate General of Foreign Trade describes the Importer-Exporter Code, or IEC, as a key business identification number mandatory for import and export activity.[1] DGFT also provides a facility to view IEC-related details using the IEC number and firm name.[2] New IEC certificates include a unique QR code for online verification.[1]
Ask the exporter for its legal business name and IEC. Then compare that information with the entity issuing the quotation, proforma invoice and contract.
A buyer should investigate unexplained inconsistencies — for example, where the contract names one company, the proforma invoice names another, payment is requested to an unrelated entity, or the exporter provides credentials belonging to a different business.
There can be legitimate commercial structures involving group companies, agents or trading entities. The issue is not that every difference indicates fraud. The issue is whether the supplier can clearly explain and document the relationship.
Know exactly which legal entity is selling the goods and receiving payment before you sign the contract.
2. Is APEDA Registration Relevant to the Product?
APEDA registration should be checked in context.
The Agricultural and Processed Food Products Export Development Authority has responsibility for specified scheduled product categories.[3] APEDA's published product categories include fruits and vegetables and their products, meat and meat products, poultry products, dairy products, confectionery and bakery products, honey and several other agricultural and processed food categories.[4]
Exporters dealing in APEDA scheduled products can apply for a Registration-cum-Membership Certificate, or RCMC, after obtaining an IEC.[3] APEDA provides an exporter-status lookup and a registered exporter directory.[5][6]
If the product falls within APEDA's mandate and the supplier represents itself as APEDA registered, ask for the RCMC details and verify the status through APEDA's official system.
However, do not use "APEDA registered" as a universal quality certificate. Registration and product quality verification answer different questions.
Verify the exporter's APEDA status where relevant, but still conduct product, quality and supplier due diligence separately.
3. What Exact Product Are You Contracting to Buy?
"Sesame seeds." "Basmati rice." "Coriander."
These may be commercial product names, but they are rarely complete purchase specifications. An agricultural purchase contract should identify the product precisely enough for buyer and seller to understand what constitutes acceptable delivery.
Depending on the commodity, the specification may address:
- variety, grade and crop year
- country and region of origin
- purity and foreign matter tolerance
- moisture content
- broken or defective percentage
- seed size and colour
- microbiological parameters
- pesticide residue limits
- packaging type and net weight per unit
Not every parameter applies to every product. The specification should follow the commodity and destination-market requirement.
The important question is: if the buyer says the goods do not meet the contract, what objective specification will both parties use to assess that claim?
A product specification should not exist only in a messaging conversation after the purchase contract has been signed. It should be incorporated into the commercial agreement or clearly referenced as an agreed specification document.
If the contract only says "Indian sesame seeds — 25 MT," the buyer and seller may have very different ideas about what acceptable product means.
4. What Does the Certificate of Analysis Need to Show?
A Certificate of Analysis, or COA, should be connected to the agreed product specification.
Before signing, clarify:
- Which parameters will be tested?
- Which laboratory or testing arrangement will be used?
- Will the COA relate to the shipment, lot or another sample?
- When will the buyer receive the report?
- What happens if a parameter is outside the agreed tolerance?
The buyer should avoid requesting a generic "COA" without defining what the report needs to demonstrate. For some products, moisture and purity are the central commercial parameters. For other markets, microbiological or pesticide residue testing may be critical. The testing plan should follow the commodity, its intended use and the destination-market requirements.
Agree on the required test parameters before the exporter arranges testing. A COA is only useful when it answers the quality questions relevant to the contract.
5. Who Has the Right to Inspect the Goods Before Shipment?
If the buyer requires pre-shipment inspection, the contract should state the requirement. International trade guidance notes that pre-shipment inspection requirements are normally defined through the relevant documentary or letter-of-credit requirements.[9]
The parties should clarify:
- who appoints the inspection company
- who pays the inspection cost
- when inspection occurs
- what is inspected and which specification is used
- what sampling method applies
- whether the inspection result is final for specified parameters
- what happens if the goods fail inspection
The contract should also distinguish between a commercial quality inspection and regulatory inspection by an authority. They are not necessarily the same process.
"Buyer may inspect goods" is weaker than a defined inspection procedure with timing, scope and consequences.
6. Which Incoterm Applies — and What Is the Named Place or Port?
Incoterms are internationally recognised trade rules published by the International Chamber of Commerce.[7] The Incoterms 2020 framework contains 11 rules that allocate specified tasks, costs and risks between buyer and seller.[7][8]
Simply writing "FOB" or "CIF" in an email is not enough for a carefully structured international transaction. The contract should identify the selected rule, the relevant named port or place and the version of the rules in use.
For example: FOB Mundra Port, India — Incoterms® 2020
The selected Incoterm affects the allocation of responsibilities and risk during the trade movement. However, Incoterms do not replace the complete purchase contract. The parties still need clear product, payment, quality and dispute terms.
Ask not only "What is the price?" Ask "What exact Incoterm and named place is this price based on?"
7. What Are the Payment Terms?
Payment terms should be explicit. International transactions can use structures including cash in advance, letters of credit and other payment arrangements. Different payment methods allocate commercial and credit risk differently.[10]
The contract should state:
- currency
- total contract value or pricing mechanism
- deposit or advance amount
- payment milestones
- payment method
- bank details and beneficiary name
- documents or events triggering each payment
- payment due dates
If a letter of credit is used, documentary requirements should be reviewed carefully before shipment. A mismatch between contractual requirements, letter-of-credit terms and actual shipping documents can create operational problems and payment delays.
Buyers should independently verify any changes to payment instructions through an established communication channel. Do not act on payment instruction changes received only by email or messaging without direct voice confirmation.
"30% advance, balance before shipment" is a commercial starting point. The contract should still define the payment trigger and the supporting documents required.
8. Which Documents Must the Exporter Provide?
The required document set depends on the product, destination and transaction structure. A contract may require some or all of the following:
- commercial invoice
- packing list
- Bill of Lading or other transport document
- Certificate of Origin
- Certificate of Analysis
- phytosanitary certificate (where the product and destination require it)
- inspection certificate (where agreed)
- product or destination-specific certificates (halal, organic, FSSAI, APEDA, country-of-origin preference documents)
Do not copy a document checklist from an unrelated commodity transaction. The buyer should identify what customs, food-safety, plant-health and commercial documents are required for the exact product and destination market. The contract should clearly identify which documents the seller must provide and by when.
Agree on the document list before shipment. Discovering a required certificate is missing after the vessel has departed can create avoidable cost and delay.
9. What Happens If the Goods Do Not Meet the Specification?
This question should be answered before a quality dispute exists.
The contract should address the agreed process for handling an alleged non-conformity. Questions to address in advance include:
- How quickly must the buyer notify the seller?
- What evidence is required?
- Who performs testing or re-testing?
- How are counter-samples retained?
- Can an independent laboratory be used and, if so, whose result is determinative?
- What remedies are available under the agreed contract?
Agricultural commodities can involve natural variation. That makes agreed specifications, tolerances and sampling procedures particularly important before a dispute arises. The precise legal wording should be reviewed by appropriate legal counsel.
A quality clause should explain how a disagreement is assessed — not merely state that the exporter promises "best quality."
10. What Law Governs the Contract and How Will Disputes Be Resolved?
International buyers and Indian exporters operate across legal systems. The purchase contract should therefore address governing law and dispute resolution.[11][12]
The parties may choose litigation, arbitration or another agreed mechanism depending on the transaction and legal advice received. Where arbitration is selected, the agreement should be drafted clearly.
Relevant questions include:
- Which arbitration rules apply?
- What is the agreed seat or place of arbitration?
- How many arbitrators will be appointed?
- What language will be used in proceedings?
- What law governs the substantive contract?
UNCITRAL publishes Arbitration Rules and a model arbitration clause framework that parties can use as a reference.[13] India's Arbitration and Conciliation Act recognises that parties are free to agree on the place of arbitration.[14]
These are legal drafting decisions. Buyers and exporters should obtain appropriate legal advice rather than copying a clause from another company's purchase contract.
"Any dispute will be mutually resolved" is not a complete dispute-resolution mechanism for a serious cross-border purchase contract.
The 10 Questions to Ask Before You Sign
Before signing a purchase contract with an Indian agricultural exporter, ask:
- Which legal entity is selling the goods and what is its IEC?
- Is APEDA registration relevant, and can the claimed RCMC status be verified?
- What exact product specification forms part of the contract?
- Which COA parameters and testing evidence are required?
- Does the buyer have a defined pre-shipment inspection right?
- Which Incoterm, named place or port and rules version apply?
- What are the exact payment terms and payment triggers?
- Which shipment and regulatory documents must the seller provide?
- How will product non-conformity and quality disputes be assessed?
- What governing law and dispute-resolution process apply?
The answers should be documented. A buyer should not rely on memory of a sales call for issues that may later determine whether a shipment complies with the purchase agreement.
At Oceanis Mercantile, we believe product specifications, destination requirements and commercial shipment terms should be discussed and agreed clearly before a transaction is finalised. International buyers evaluating agricultural sourcing from India can discuss their product requirements, specifications and destination market with the Oceanis Trade Desk.