/ Foreign Clients · Supplier DD · Updated 2026-10-14

India supplier verification, before you send the wire.

Foreign buyer / importer placing a first purchase order with an Indian supplier — is the supplier real, financially sound, legally registered, and operationally capable of delivery? BQP does a 5-10 business day supplier verification covering MCA / GST / IEC validation, financial filings review, bank + trade reference check, site visit + factory audit, counterparty risk assessment. Standard before committing INR 10 lakh+ POs.

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Written by CA Durgesh Chavda

Chartered Accountant (ICAI) · Founder, Bharat Quantum Prospera · US incorporation, India-US DTAA, FEMA ODI, NRI taxation, cross-border structuring · LinkedIn

/ What verification covers

Six checks.

1. Statutory existence

MCA (Ministry of Corporate Affairs) check: CIN + incorporation date + current status + registered office + directors + paid-up capital.
PAN (Permanent Account Number) verification against Income Tax database.
GST registration verification + current status (active / cancelled / suspended) + state registration.
IEC (Importer Exporter Code) for international trade.
Udyam MSME registration (if claimed) + category (Micro / Small / Medium).
Shops & Establishment registration + state-specific licences (based on sector).

2. Financial health

Last 3 years' audited financials (from MCA public filings) — revenue trend, profitability, net worth, debt levels.
Form AOC-4 + MGT-7 timely filing check (compliance signal).
DPT-3 return of deposits (indicator of external borrowing).
Current bank statement review (3-6 months) — cash flow sanity, GST payment trail.
CIBIL commercial credit score (if accessible).

3. Compliance history

Pending Income Tax demands / notices (via Form 26AS + ITR filings).
GST demand / notice (via GST portal).
MCA strike-off history / disqualified director history.
Pending prosecutions / FIRs / NCLT / DRT cases.

4. Operational capacity

Physical site visit: factory / warehouse / office. Photo + video documentation.
Employee count + verification (PF registration + ESI contributions).
Equipment / plant verification.
Inventory check for buffer stock.
Certifications (ISO / FDA / BIS / FSSAI / Export House / Deemed Export status).

5. Trade reference check

3-5 existing customer references — interview on supply quality, timeliness, defect rate, dispute resolution.
3-5 vendor references (payment behaviour).
Bank reference (optional — requires supplier consent).

6. Beneficial ownership + sanctions

Ultimate beneficial owner (UBO) mapping — who really owns and controls.
Sanctions check: OFAC, UN, EU, UK, Indian MHA black lists.
Related party exposure (relationship with other Indian companies).
Press Note 3 beneficial ownership from land-bordering country verification.

/ Scope + deliverable

What you get.

Deliverables (5-10 business days):

Supplier Verification Report (8-15 pages): all 6 checks + red flags + green flags + overall risk rating (Low / Medium / High).
Supporting documents: MCA filings, GST certificate, PAN verification, factory photos, trade reference transcripts.
Specific recommendations: proceed / proceed with conditions (e.g., LC not open account) / do not proceed.
Pre-PO checklist: contract terms, retention, inspection rights, dispute resolution, warranty.

Scope-based: light verification (statutory + public records only, 3-5 days) vs full verification (statutory + financial + site visit + references, 7-10 days) vs enhanced DD (statutory + financial + site visit + references + beneficial ownership + sanctions, 10-15 days).

/ When supplier verification matters

The use cases.

First-time purchase order above INR 10 lakh (~USD 12K).
Introducing a new supplier for critical supply (single-source risk).
Changing supplier terms (open account vs LC vs TT advance).
Expanding supply relationship (increasing order volume).
Due diligence on potential supply chain partner for M&A.
Supplier onboarding for government / regulated supply chain (automotive, defence, pharma, aerospace).
Compliance with your home-country supplier due-diligence law (UK Modern Slavery Act, German Supply Chain Act, EU CSDDD).

/ Red flags to watch for

What to decline on.

Recent MCA strike-off action: supplier was recently struck off; even if revived, serious risk.
Disqualified director history: current director disqualified under Section 164 (even if revived).
Mismatch between registered office and actual operation: letterbox office; real operation elsewhere (unregistered).
GST registered but no recent filings: shows business inactivity.
Negative net worth / negative P&L in recent audited financials: material financial distress.
Multiple pending Income Tax / GST notices: pending demand exposure that could lead to attachment / recovery proceedings.
Related-party transactions dominant: supplier is really a captive of parent/sister company; little independent operation.
Press Note 3 BO issue: ultimate beneficial owner from land-bordering country without government approval.
Trade references unresponsive or negative: existing customers can't vouch or do so weakly.
Site visit red flags: office empty, equipment doesn't match claims, employee count overstated, no production evidence.

Last updated: 2026-10-14.

/ Ready when you are

New Indian supplier? Verify before you wire.

5-10 day supplier verification: MCA + GST + IEC + financials + factory audit + references + sanctions. Report + risk rating + proceed/decline recommendation. Standard scope-based engagement for foreign importers.

Get a firm quote → WhatsApp Durgesh

FAQ

Common questions, answered.

How long does Indian supplier verification take?

5-10 business days typical. Light scope (statutory + public records): 3-5 days. Full scope with site visit + references: 7-10 days. Enhanced DD with beneficial ownership + sanctions: 10-15 days. Site visit cities within 2 days drive of BQP offices (Ahmedabad / Mumbai / Bengaluru / Rajkot / Dubai) are faster.

What does Indian supplier verification cost?

Scope-based engagement. Light verification is low-cost standard engagement. Full verification with site visit scales with distance + complexity. Enhanced DD with sanctions screening is highest. Request a scoped quote based on supplier location + scope needed. Standard engagement for mid-market foreign importers placing new POs.

Can site visit be done at any Indian location?

Yes - BQP coordinates with associate CA firms across Indian cities when the supplier is outside our offices' direct coverage (Ahmedabad / Mumbai / Bengaluru / Rajkot). Even remote-cluster locations (industrial towns in Gujarat, Tamil Nadu, Maharashtra manufacturing belt) are covered.

Will the supplier know we're running verification?

Depends on scope. Light verification uses only public records - no supplier contact. Full verification requires supplier's cooperation (bank statements, financials beyond MCA filings, factory access, trade reference consent) - so supplier is informed. Enhanced DD can include covert elements like mystery shopping or press/litigation search without supplier contact. Choose scope based on your due-diligence posture.

Does this cover supplier compliance with foreign ESG / modern slavery laws?

Yes - we specifically review labour compliance (PF, ESI, child labour certifications, factory licence), environmental compliance (Pollution Control Board, water + air clearances), and workplace safety where applicable. Output can be formatted to support compliance with UK Modern Slavery Act, German Supply Chain Act (LkSG), EU Corporate Sustainability Due Diligence Directive (CSDDD).

Does BQP handle Indian supplier verification for foreign buyers?

Yes - standard service. Light / Full / Enhanced tiers. 5-15 business days. Supplier Verification Report + risk rating + proceed/decline recommendation + pre-PO checklist. WhatsApp +91 78018 87130.