Payment Terms for Indian Handicraft Orders — T/T, LC, PayPal, Wise Guide

Payment terms are one of the most important — and often most anxious — aspects of importing from India for the first time. This guide explains the common payment methods, their risks, costs, and what to expect from legitimate Indian handicraft manufacturers.

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Standard Payment Terms in the Indian Handicraft Trade

The most common payment structure for Indian handicraft exports is:

30% advance deposit + 70% before shipment (T/T)

This means:

1. You pay 30% of the total invoice value when confirming the order
2. The manufacturer produces your goods
3. You pay the remaining 70% when goods are ready for shipment (after pre-shipment inspection/photos)
4. The manufacturer ships after receiving full payment

This structure protects both parties: the manufacturer has a committed advance; you control final payment until you have confirmed production quality.

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Payment Method 1: T/T Bank Wire Transfer (Most Common)

What it is: A bank-to-bank wire transfer (Telegraphic Transfer) in USD, EUR, or GBP to the supplier's business bank account.

Why it is standard: Cheap, direct, and accepted by all legitimate Indian exporters. Indian banks process T/T receipts and convert to INR efficiently.

Costs:

• Sending bank fee: $15–$50 per transfer (varies by bank)
• Intermediary bank fee: $10–$25 (SWIFT correspondent charges)
• Currency conversion: 0.5–2% spread on exchange rate
• Receiving bank fee: Usually absorbed by Indian bank or minimal

Timeline: 2–5 business days to reach the supplier's account

Safety tips for T/T:

1. Always transfer to the company bank account (not a personal account)
2. Verify the company name matches the bank account name before first transfer
3. Use the Proforma Invoice (PI) as your payment reference — include PI number in wire description
4. Keep all transfer receipts as documentation

Risk: Lower than you think with legitimate manufacturers. The 30% advance is the only amount at risk before goods are in production. The 70% is paid only after you have confirmed production photos.

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Payment Method 2: Letter of Credit (LC)

What it is: A bank guarantee issued by your bank to the supplier's bank, promising payment upon presentation of specific shipping documents.

When to use: Large orders ($50,000+) with a new supplier, or when you need maximum protection.

Advantages:

• Maximum buyer protection — payment only on document compliance
• Bank verifies documents (not just you)
• Standard for large global trade

Disadvantages:

• Complex to set up — requires both banks
• Expensive: $300–$1,000 in bank fees
• Strict documentation requirements — any discrepancy causes delays
• Not practical for small orders or fast-moving suppliers

Verdict for handicraft buyers: Overkill for orders under $20,000. Use for large, first-time orders if you want maximum protection.

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Payment Method 3: PayPal

What it is: Online payment platform. Some Indian exporters accept it.

Advantages:

• Buyer protection for non-delivery or significantly not-as-described claims
• Easy to use

Disadvantages:

• High fees: PayPal charges the Indian exporter 4.4% + fixed fee — many refuse it or add surcharge
• Transaction limits: Difficult for large amounts
• Currency conversion: Unfavourable rates

Verdict: Acceptable for sample orders ($50–$500). Not practical for bulk orders.

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Payment Method 4: Wise (formerly TransferWise)

What it is: Online international transfer at mid-market exchange rates, significantly cheaper than bank wire.

Advantages:

• Exchange rate: Near mid-market (0.3–0.7% spread vs 1–2% for banks)
• Fees: $3–$15 vs $25–$50 for bank wires
• Fast: Often 1–2 business days

Disadvantages:

• Transfer limits per day/transaction (verify current limits)
• Not all Indian banks accept Wise transfers smoothly — confirm with your supplier first
• Some Indian exporters prefer traditional wire for accounting purposes

Verdict: Excellent option for small-to-mid-size orders. Ask your supplier if they accept Wise before using.

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Payment Method 5: Trade Assurance (Alibaba)

If you are sourcing via Alibaba, Trade Assurance offers buyer protection by holding your payment in escrow until you confirm receipt.

Best for: First-time Alibaba orders where you have no existing relationship with the supplier.

Limitation: Only applies to Alibaba-listed orders. Direct manufacturers like Vidhiraj Global Impex typically deal direct, not through Alibaba.

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Red Flags in Payment Requests

Red Flag	What It Means
Request to pay to a personal account	High fraud risk — legitimate companies use business accounts
Different bank account than shown on official documents	Possible fraud or compromised email
Pressure to pay 100% advance	Against industry norms — refuse
Request for Western Union, MoneyGram, or crypto	Classic fraud vectors — refuse
Invoice bank details sent via email last-minute	Verify by phone before transferring — email compromise scam

Email compromise scam: The most common fraud in international trade. A fraudster intercepts your email with the supplier and sends a fake invoice with their own bank details. Always call your supplier to verify bank account details before the first transfer.

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Summary: What to Use

Scenario	Recommended Method
Sample order ($50–$500)	PayPal or Wise
Small bulk order ($500–$5,000)	T/T or Wise
Regular bulk order ($5,000–$50,000)	T/T bank wire
Large first-time order ($50,000+)	Letter of Credit

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Payment Terms at Vidhiraj Global Impex

Standard terms: 30% advance + 70% before shipment via T/T bank wire (USD preferred).

We also accept Wise transfers — contact us to confirm details. For orders over $30,000 with new buyers, we can discuss Letter of Credit terms.

Request a Proforma Invoice → to get started.