How to not get scammed sourcing from India
Kavita Tewari
Most sourcing fraud in 2026 is designed to pass the standard checks. A valid GSTIN copied from a real company, an AI-generated factory tour, a sample bought from a local shop. The single rule that catches most of it: every name must match. Company name on the invoice, on the bank account, on the GSTIN and on the export licence, exactly.
If you have read a verification checklist and feel reassured, you are the reader this is written for.
The checks are necessary and you should run them. But the people running scams have read the same checklists, and the current patterns are built specifically to survive them. Here is what that looks like.
First, separate fraud from overstatement
Most of what goes wrong is not fraud, and treating it as fraud makes you worse at sourcing rather than safer.
Overstatement is a claim that is true in a narrow sense and gets stated broadly. We interviewed a manufacturer whose website listed four sustainability certifications. They hold none of them. Their fabric supplier holds two. They told us this openly the moment someone asked.
That is not a scam. That is a website written optimistically by someone who has never been asked a precise question. It is extremely common, it is fixable with one direct question, and the supplier is often perfectly good.
We have also had a studio answer "all of them" when asked which certifications their manufacturing partners hold. Also not fraud. Also not an answer.
Fraud is different in kind. It involves a fabricated identity, a payment that goes somewhere unexpected, or goods that never existed. It is rarer, and it looks like the patterns below.
Why it matters: overstatement is solved by asking better questions. Fraud is solved by not transacting. Confusing the two either makes you paranoid about good suppliers or relaxed about bad ones.
The scams that defeat the standard checks
1. The valid GSTIN that belongs to someone else
How it works. The most common pattern reported in 2026. The supplier gives you a GSTIN that is entirely genuine and checks out perfectly on the government portal. It simply belongs to a different company, copied from a real business and pasted into their signature block.
Why the standard check fails. You verified the number. The number is real. You did not verify that the number belongs to the entity you are talking to.
What catches it. Check the registered legal name attached to that GSTIN and compare it, character by character, against the company name on the invoice, the domain, and the bank account. A mismatch of any kind is the whole signal.
2. The identity assembled from parts
How it works. The invoice says one company name, the bank account is in a slightly different name, the GSTIN belongs to a third entity and the export licence to a fourth. Each document is individually plausible.
Why the standard check fails. Checklists tell you to collect documents. They rarely tell you to cross-reference them against each other.
What catches it. Lay all four side by side and compare the names. Discrepancies between invoice, bank account, GSTIN and IEC indicate an identity cobbled together to deceive foreign buyers. Even a one-character difference in the bank account name is disqualifying. Legitimate businesses do not have near-miss names on their own bank accounts.
3. The AI-generated factory tour
How it works. This is new and it undermines advice that was sound two years ago. Virtual factory tours are now being generated with rendering and deepfake tools, complete with workers, machines and gauges. Some use augmented reality overlays to simulate a production floor that does not exist.
Why the standard check fails. "Ask for a video walkthrough" is standard advice, including in our own verification guide. It is no longer sufficient on its own.
What catches it. Make it unscheduled and interactive. Ask them to walk to a specific machine you name. Ask them to hold up today's newspaper, or to show a specific order in progress with your reference on it. Ask an unexpected question mid-tour. Rendered environments do not improvise.
Better still, commission your own inspection rather than accepting any footage they provide.
4. The borrowed factory
How it works. A trading company arranges a site visit to a facility it does not own or control, and presents it as its own. You see a real factory with real machines. It is simply not theirs.
Why the standard check fails. You visited a factory. The factory was real.
What catches it. Ask, on site, to see the licence and registration documents displayed at the premises, and check the name matches the company you are contracting with. Ask who signs the workers' contracts. Ask to see a production run with your company's name on the paperwork.
A trading company is not automatically bad, and many are useful intermediaries. The problem is not knowing which one you have, because it changes your quality control, your pricing and your recourse entirely.
5. The fake customs hold
How it works. After goods ship, you receive a message saying the shipment is held at customs and clearance fees are needed urgently. The request comes from your supplier or a forwarder, not from a licensed customs broker. The shipment was never held.
Why the standard check fails. It happens after every verification step is complete, when your guard is down and your money is already committed.
What catches it. Customs matters go through your broker, whom you appointed. If a fee demand does not come from them, it is not real. Verify independently before any payment, always. This is also a reason to appoint a broker before your first order rather than after.
6. The sample games
How it works. Three variants. They refuse to send a sample. They charge an implausible courier fee for a small item. Or they send a generic sample bought from a local retail market that has nothing to do with their production.
Why the standard check fails. "Ask for a physical sample" is the most common advice given, so it is the most commonly gamed.
What catches it. Ask for a sample with something specific to you on it, a label, a specific colourway, a specific construction detail you named. Off-the-shelf retail goods cannot carry it. Compare the sample against your written specification rather than against your impression of quality.
7. The pressure window
How it works. A 24-hour ultimatum. Price valid today only. Another buyer is about to take the slot.
Why it works. Urgency defeats diligence, which is the entire point of it.
What catches it. Legitimate factories quote with 7 to 30 day price validity windows. Anything under 72 hours is a pressure tactic rather than a commercial reality. Raw material prices do move, and a supplier can honestly say a quote expires. They do not honestly say it expires tomorrow.
The one rule
If you take one thing from this page:
Every name must match, exactly. The company on the invoice, the account holder at the bank, the entity on the GSTIN, the holder of the export licence, and the name on the website. All identical, character for character.
Most fraud in this market fails at that single test, because a fabricated identity is assembled from real parts belonging to different owners. Legitimate businesses are boringly consistent about their own name.
Other red flags worth acting on
Refusing a video call, or only ever communicating by text
A personal bank account, or an account in a different country to the business
Pricing far below every other quote. Either a different product, a different material, or no intention to ship
Offering to undervalue the invoice to reduce your duty. Customs fraud, and the importer of record carries it
No trade references, or only references from the last year
Evasiveness about the IEC, or an IEC that is inactive. Registrations deactivate automatically if not updated between 1 April and 30 June
Reluctance to allow a paid third-party inspection. There is a reason
Full advance demanded on a production run, as opposed to a prototype
What to do if it has already happened
Nobody writes this part, and it is the reason a lot of people are reading.
Stop all further payments immediately. Including any "just one more fee to release it" request. The follow-on fee is often where most of the loss happens.
Contact your bank within hours, not days. International wires can occasionally be recalled if caught fast enough. The window is very short.
Gather everything. Invoices, chat logs, emails, bank details, the website, screenshots of the storefront before it disappears.
Report it. In India, cybercrime complaints can be filed at cybercrime.gov.in. If a marketplace was involved, report to the platform, which sometimes has recourse mechanisms.
Tell your bank it may be fraud, explicitly. It changes how they handle it.
Do not accept a replacement order as compensation. It is the most common way a loss gets extended.
Recovery is rare once funds have moved. Speed is the only variable you control.
Or let us do it
Every builder in our network has been interviewed against the same question set, and we record what we could not confirm as clearly as what we could.
Tell us what you are making, and we will point you at builders whose names all match. If we cannot help, we will say so.
Pricing & contact at: https://www.reborngoods.co/scouting
FAQ
How do I know if an Indian supplier is legitimate? Check that every name matches exactly: the company on the invoice, the bank account holder, the registered name on the GSTIN, and the holder of the export licence. The most common fraud pattern in 2026 is a genuine GSTIN copied from a real business, so verifying the number is not enough. You must verify it belongs to the company you are talking to.
Can a video factory tour be faked? Yes. Virtual tours are now being generated with rendering and deepfake tools, including simulated workers and machinery. Make any walkthrough unscheduled and interactive: ask them to walk to a specific machine, show a specific order in progress, or answer an unexpected question mid-tour. Rendered environments cannot improvise. A commissioned third-party inspection is stronger than any footage a supplier provides.
My supplier says my shipment is held at customs and needs fees. Is this real? Almost certainly not, if the request came from the supplier or their forwarder rather than from your own customs broker. This is a common post-shipment scam. Customs matters go through the broker you appointed. Verify independently before paying anything.
What is the difference between a trading company and a factory? A factory manufactures. A trading company arranges manufacturing elsewhere. Trading companies are not inherently bad and many are useful, but some present partner factories as their own during site visits. The problem is not knowing which you have, because it changes your quality control, your pricing and your recourse.
Is a 50 percent advance payment a scam? No. For a new overseas buyer on a custom order it is standard, and every manufacturer we have interviewed quoted it. Full payment before a production run is the term worth refusing, as is any payment to a personal account or to an account whose name does not match the company.
What should I do if I have already been scammed? Stop all further payments, including any fee claimed to release goods. Contact your bank within hours, since international wires can occasionally be recalled if caught immediately. Preserve all documentation before the storefront disappears. In India, cybercrime complaints can be filed at cybercrime.gov.in. Do not accept a replacement order as compensation.
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