India’s Directorate General of Foreign Trade (DGFT) has advised exporters and banks to exercise extreme caution when dealing with Bhutanese entities Legoy Powersports and Druk A-Z Store. The advisory follows unresolved trade and quality disputes, aiming to protect Indian trade interests. Stakeholders are urged to conduct thorough due diligence before processing any financial or commercial transactions with these firms.
The Directorate General of Foreign Trade (DGFT) has issued a formal notice, No. 19/2026-27, advising Indian exporters and financial institutions to exercise heightened vigilance when dealing with two Bhutanese companies: Legoy Powersports and Druk A-Z Store. This precautionary move follows a series of unresolved complaints regarding trade disputes and quality issues involving these entities.
The government's decision reflects an effort to safeguard Indian trade interests after unsuccessful attempts to resolve these matters through diplomatic and administrative channels. The DGFT reported that there has been a lack of a substantive response from both the involved companies and the relevant authorities in Bhutan, which has effectively stalled efforts to find an amicable solution to the disputes.
For Indian exporters, banks, and entities such as the Export Credit Guarantee Corporation (ECGC), this notice serves as a signal to significantly enhance their due diligence processes. Stakeholders are now advised to carefully assess the risk profile of any proposed transactions, including the extension of credit, trade facilitation, and the signing of new contracts, before engaging with these specific firms.
This advisory is issued under the provisions of Chapter 8 of the Foreign Trade Policy (FTP) 2023, which governs procedures for handling quality complaints and international trade disputes. While this directive does not constitute a formal ban, it explicitly highlights the potential for operational, financial, and recovery risks that exporters may face if they proceed with these companies without proper caution.
The warning comes during a period of expanding economic ties between the two nations. India’s two-way trade with Bhutan grew by 8.81% to $2.07 billion in the fiscal year 2025-26, with Indian exports accounting for $1.25 billion of that total. By flagging these specific firms, the ministry aims to ensure that the continued growth in cross-border trade does not compromise the payment security or contractual reliability of Indian businesses.
Exporters currently working with or considering new business with Legoy Powersports and Druk A-Z Store should prioritize risk assessment. The DGFT has also requested that stakeholders report any adverse experiences, payment issues, or contractual conflicts immediately. Maintaining clear records and verifying the status of trade partners remains an important step for businesses to manage their risks effectively in international markets.