DGFT Caution Advisory on a Bangladesh Garment Firm: Due Diligence Before You Ship

When a foreign buyer stops responding and a dispute can't be resolved, the risk lands on the Indian exporter's balance sheet. The Directorate General of Foreign Trade (DGFT), through Trade Notice No. 31/2026-27, dated 21 October 2026, has advised Indian exporters and the wider trade ecosystem to exercise heightened caution and complete due diligence before dealing with M/s Julfikar Fashions Limited, Mirpur, Bangladesh.

Importantly, this is a precautionary advisory, not a ban. DGFT has explicitly framed it as "purely as a precautionary measure," the firm is not placed on any prohibited or denied-party list, and dealings with it are not barred. The point is risk management: know who you are shipping to, and protect your payment.

What Happened

A Quality Control & Trade Dispute (QCTD) complaint was filed against the firm. DGFT reports that despite repeated follow-ups, the firm and the relevant authorities gave "no substantive response," which prevented verification of facts and an amicable resolution. Acting under para 8.07(d) of the Foreign Trade Policy 2023, DGFT issued the advisory asking stakeholders to be cautious and to report any adverse experiences.

The notice asks Export Promotion Councils, industry associations, Regional Authorities, ECGC, authorised dealer (AD) banks and other stakeholders to:

• Exercise enhanced caution and thorough due diligence before any commercial dealing with the firm.
• Alert exporters, importers and trade participants to the concern.
• Assess transaction risk — including when processing applications, extending finance or credit, or issuing certifications.
• Report any adverse experiences, payment problems or contract disputes involving the firm to DGFT.

Why / Background

Para 8.07 of the FTP deals with handling of quality complaints and trade disputes. A precautionary advisory of this kind is a well-established DGFT tool: it does not adjudicate the dispute or blacklist the party, but it puts the trade on notice so that exporters can make informed decisions and price in the risk. For the Indian exporter, the real exposure in a non-responsive-buyer situation is commercial: unpaid invoices, rejected or delayed consignments, and disputes that are hard to enforce across borders.

Who's Affected

Indian exporters currently dealing with, or considering dealing with, the named firm — particularly in garments/apparel, but the caution applies to anyone transacting with it.

AD banks and ECGC: Should weigh the advisory when extending export finance, credit insurance or processing related transactions.

Export Promotion Councils and associations: Expected to circulate the caution to members.

More broadly, this is a useful prompt for every exporter to revisit buyer due-diligence and payment-security practices, regardless of this specific firm.

What Exporters Should Do Now

• Check your exposure. If you have open orders, receivables or contracts with the named firm, review them against this advisory and tighten terms.
• Harden payment security. For any new business with the firm, prefer advance payment or a confirmed irrevocable Letter of Credit over open account; avoid shipping on unsecured credit.
• Use ECGC cover. Consider export credit insurance for the transaction and confirm whether this advisory affects cover or premium.
• Run proper KYC/due diligence on the counterparty: trade references, past payment behaviour, and the status of the underlying dispute.
• Document everything. Keep contracts, quality specifications, inspection reports and correspondence in order, so you are protected if a dispute arises.
• Report problems to DGFT. If you have had payment or contract trouble with the firm, report it as the notice requests — it strengthens the collective picture.

The Bigger Picture

Cross-border receivables risk has been in sharper focus across the India–Bangladesh corridor amid broader trade frictions. Advisories like this are a reminder that the cheapest insurance against a bad buyer is disciplined due diligence and secure payment terms — not litigation after the fact. Exporters should treat buyer-risk screening and payment-instrument selection as standard operating procedure on every new relationship, especially where a counterparty has an unresolved dispute on record.

Frequently Asked Questions

Does this mean I cannot export to this firm? No. The firm is not on a prohibited or denied list and dealings are not banned. DGFT advises caution and due diligence, not avoidance.

What exactly triggered the advisory? An unresolved Quality Control & Trade Dispute complaint, combined with what DGFT describes as no substantive response from the firm or relevant authorities to its follow-ups.

I'm mid-contract with this buyer — what should I do? Review your payment security and documentation, tighten terms where possible, consider ECGC cover, and consult your bank. Report any adverse experience to DGFT.

Will this show up as a sanction or blacklist? No. It is a precautionary trade notice under FTP para 8.07(d), not a sanction or blacklisting.

Conclusion

DGFT's Trade Notice No. 31/2026-27 is a yellow flag, not a red one. Keep trading if you choose to, but do it with eyes open: secure your payment, document your shipments, use credit insurance, and report any problems. Good buyer due diligence is the takeaway for the whole corridor, not just this one firm.

This article is for general guidance. The operative instrument is DGFT Trade Notice No. 31/2026-27, dated 21 October 2026, issued under FTP 2023 para 8.07(d). Verify the current status and details against the official notice on the DGFT portal (dgft.gov.in) before acting.