Getting a purchase order from an overseas buyer feels like a win — until they don't pay. Bad debts from international buyers have wiped out the margins of dozens of Indian exporters. The good news: a creditworthy buyer leaves a trail. Here is how to read it before you ship a single carton.
Key point: Checking a buyer's creditworthiness is not about distrust — it is standard global trade practice. Buyers who have been importing for years expect it and respect exporters who ask.
Why Buyer Credit Checks Matter
When you export on open account (30, 60, or 90-day credit), you are effectively lending the buyer your product for that period. If they default, you lose the goods and the payment. Indian exporters lose an estimated $800 million annually to bad international debts, most of it from first-time buyers given credit too quickly.
Step-by-Step: 5 Ways to Verify a Buyer
Apply for an ECGC Buyer Credit Limit
The Export Credit Guarantee Corporation of India (ECGC) will assess your buyer and grant a credit limit — the maximum amount you can ship on credit and still be covered. If ECGC approves a limit of $50,000, you know the buyer has passed a formal credit screen. Premium is 0.4–0.9% of invoice value. This is the single most powerful tool for Indian exporters and most underuse it.
Check Their Import History in Shipment Data
A buyer who has been importing your product category consistently for 2+ years is a far safer bet than a new company with no history. Search the buyer's name in a customs-shipment database — like EximHub — to see how many shipments they have received, from which countries, and how recently. Regular, increasing import volumes are the strongest signal of a healthy business.
Request a Bank Reference Letter
Ask the buyer to provide a bank reference letter from their local bank. The letter typically confirms: the account exists, the account has been in good standing for X years, and the bank has no objection to the buyer entering into trade transactions. This is standard in international trade — any legitimate buyer will provide it without hesitation.
Get Two Trade References
Ask the buyer for contact details of two suppliers they currently buy from. Call or email those suppliers directly and ask one question: "Does this buyer pay on time?" A good buyer will give you references proudly. A buyer who delays or refuses is telling you something important.
Use a Credit Agency Report
For orders above $25,000, commission a credit report from Dun & Bradstreet, Creditsafe, or Coface. These cost $50–$200 and give you the buyer's payment history, legal disputes, years in business, and a risk score. Worth every rupee on a large order.
Payment Terms by Risk Level
| Buyer Risk | Recommended Payment Terms | Why |
|---|---|---|
| Unknown / first order | 100% advance payment or Letter of Credit | No history to evaluate |
| Low risk (verified, ECGC-approved) | 30% advance + 70% against documents | Aligns incentives for both sides |
| Established buyer (2+ years history) | 30–60 day open account | Relationship warrants credit |
| Strategic buyer (high volume) | 60–90 day open account + ECGC cover | Volume justifies risk; insure it |
Red Flags: Do Not Ship to This Buyer
Warning Signs
- No verifiable company address or registration number in their country
- Insisting on 100% credit on the very first order with no references
- Using a free webmail (Gmail, Yahoo, Hotmail) for a supposedly large company
- No import history at all in customs shipment records
- Pressure to ship urgently before paperwork or payment is completed
- Refuses to provide bank reference or trade references
- Company registered less than 6 months ago with no online footprint
How EximHub Helps You Find Pre-Vetted Buyers
Every buyer in EximHub's database comes from real customs shipment records — meaning they have physically imported goods before. You can see exactly how many shipments a buyer has made, from which countries, and in which product categories. This import history is the most reliable proxy for buyer creditworthiness available to Indian exporters without paying for a credit report.
When you reveal a contact on EximHub, you also get their email verified status — our MX-verification system flags dead inboxes before you waste time writing to them.
Pro tip: Look for buyers who have imported from India before. They understand Indian payment cycles, shipping times, and documentation requirements. Conversion rates are 3x higher than buyers with no India import history.
Frequently Asked Questions
How do I check if an overseas buyer will pay?
Use a combination of: ECGC credit limit approval, a bank-to-bank reference check, trade references from their existing suppliers, and customs shipment history showing regular import activity. If they have imported the same product multiple times over 2+ years, the risk is much lower.
What is ECGC and how does it help exporters?
ECGC (Export Credit Guarantee Corporation of India) provides credit insurance to Indian exporters. You apply for a buyer credit limit; ECGC verifies the buyer and covers up to 90% of your loss if the buyer defaults. Premium is typically 0.4–0.9% of invoice value — very low for the protection it provides.
Can I verify a buyer for free?
Yes, partially. Checking their import history in a shipment database is free or low-cost. Requesting bank and trade references costs nothing. A formal ECGC application and a credit agency report cost money but are worth it for orders above $10,000.
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Search EximHub's database of 3,19,000+ shipment records to see any buyer's real import activity before you ship.
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