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DGFT Advisory Against Two Bhutanese Firms: Why Exporters and Importers Need to Exercise Caution?
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....GFT Advisory Against Two Bhutanese Firms: Why Exporters and Importers Need to Exercise Caution?<br>By: - YAGAY and SUN<br>Customs - Import - Export - SEZ<br>Dated:- 17-8-2026<br>Introduction The Directorate General of Foreign Trade (DGFT), Ministry of Commerce & Industry, Government of India, has issued Trade Notice No. 19/2026-27 dated 11 August 2026, advising Indian exporters, importers and o....
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....ther trade stakeholders to exercise heightened vigilance while dealing with two Bhutanese entities: • M/s Legoy Powersports, Thimphu, and • M/s Druk A-Z Store, Thimphu. The advisory follows a complaint received against the two entities. According to the DGFT, the matter was pursued through appropriate diplomatic and administrative channels with the objective of resolvi....
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....ng the concerns and facilitating an amicable settlement. However, despite repeated efforts and follow-up communications, no substantive response was received from the concerned firms or relevant authorities. This lack of cooperation, according to DGFT, has made it difficult to verify the facts and resolve the matter. Importantly, the DGFT notice is described as a precautionary advisory, rather ....
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....than a declaration that the entities are prohibited from conducting trade. Nevertheless, the notice carries significant implications for Indian businesses considering commercial transactions with the named firms. Background of the Advisory The advisory has been issued under Para 8.07(d) of the Foreign Trade Policy (FTP), 2023. DGFT has specifically asked Export Promotion Councils (EPCs), Reg....
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....ional Authorities, Export Credit Guarantee Corporation of India Ltd. (ECGC), Authorized Dealer Banks and other stakeholders to exercise enhanced caution. The notice reflects the importance of conducting appropriate due diligence when entering into cross-border commercial arrangements. Where concerns have been raised and efforts to obtain clarification have not produced a substantive response, e....
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....xporters and importers may face additional commercial and payment-related risks. Why Exporters and Importers Should Be Cautious? Indian businesses dealing with overseas buyers or sellers should treat the advisory as an important risk signal. Before entering into a new transaction with the two named Bhutanese entities, businesses should undertake comprehensive due diligence, including verific....
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....ation of the counterparty, contractual terms, payment arrangements, banking details and previous trading experience. Exporters should be particularly careful about extending credit or supplying goods without adequate payment security. Depending on the nature and value of the transaction, businesses may consider appropriate safeguards such as advance payment, secured payment mechanisms, document....
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....ary controls, suitable contractual protections and other commercially appropriate risk-mitigation measures. Importers should similarly verify the credentials of the overseas supplier and carefully examine contractual obligations, delivery commitments, quality specifications, documentation and payment terms before committing funds or accepting commercial exposure. Role of Banks, EPCs and Othe....
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....r Stakeholders The DGFT has also advised relevant institutions to carefully assess the risk profile of transactions involving the two entities while processing applications, providing financial or credit support, offering trade facilitation services, or issuing certifications and recommendations. The advisory therefore goes beyond individual exporters and importers. It places the matter on the ....
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....radar of the broader trade ecosystem, including banks, EPCs, ECGC and DGFT's Regional Authorities. Reporting of Adverse Experiences The DGFT has specifically advised stakeholders to promptly report any adverse experience, payment-related issue, contractual dispute or other relevant information concerning the two entities to the Directorate for further examination and necessary action. Bu....
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....sinesses that have previously dealt with the concerned firms and have experienced payment defaults, contractual difficulties or other material problems should therefore consider maintaining complete documentary records and reporting relevant information to DGFT through the appropriate channel. Advisory Is Precautionary in Nature A key aspect of the notice is that DGFT has expressly stated th....
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....at the advisory is being issued purely as a precautionary measure based on the information presently available. It is intended to alert the trading community to potential risks associated with dealings involving the named entities. Accordingly, businesses should distinguish between a precautionary advisory and a formal prohibition or ban. The notice calls for heightened vigilance and due diligence....
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....; it should not automatically be interpreted as a blanket prohibition on every transaction with the entities. Practical Takeaway for the Trading Community The DGFT advisory serves as a broader reminder that cross-border trade requires continuous assessment of counterparty and payment risks. Exporters and importers should not rely solely on the commercial assurances of an overseas buyer or su....
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....pplier. Proper verification and documentation are essential, particularly where an official government advisory has identified a potential risk. Businesses considering transactions with M/s Legoy Powersports, Thimphu, and M/s Druk A-Z Store, Thimphu, should therefore exercise enhanced caution, undertake comprehensive due diligence, evaluate the proposed transaction carefully and ensure that app....
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....ropriate commercial safeguards are in place. The latest DGFT notice underscores a simple but important principle for international trade: before entering into a transaction, know your counterparty, assess the risks and secure your commercial interests. *** =============<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....