A long-term contract with an Indian processor works when it fixes the specification, the volumes and the shipment schedule, and sets a clear method for agreeing price each season. It also has to be one both sides can live with in a bad crop year. Build it after a few successful orders, not before the first.
This is general guidance, not legal advice. Have a lawyer who works on international sale of goods contracts draft or review the final document.
Start with a trial period
Two or three orders tell you more than any contract. You learn whether the processor meets the specification, ships on time and answers problems honestly. The processor learns whether you pay on time and order what you forecast. Use what you learn to write the contract.
Keep a record of each trial order: test results against the specification, the shipment date against the agreed date, and how any problem was handled. That record shows both sides where the contract needs to be precise.
What the contract should cover
- The specification, as an annex, with test methods and the lab that tests.
- Annual volume, with an agreed tolerance either way.
- A shipment schedule, or a call-off process with notice periods.
- How price is set. See forward or seasonal price booking.
- Payment terms and the documents that trigger payment.
- Approval samples, pre-shipment inspection and retained samples.
- A claims procedure, with time limits and how test results are settled.
- Packing, marking and labelling.
- Force majeure, including government export restrictions. See how export bans affect supply.
- Governing law and dispute resolution.
- How either side can end the contract, and with what notice.
Pricing that survives a bad season
Agri prices in India move with the crop, the monsoon and domestic demand. A price fixed for several years tends to break when the market moves sharply. The side that is losing money stops performing, and a contract on paper does not change that.
A more durable approach is to commit volumes for the year and book price per season or per shipment. Agree in advance how price will be reviewed, for example against APMC prices at agreed points. That keeps both sides in the deal.
Agree too what happens in a short crop year. The processor may not be able to supply the full volume at the agreed grade. Decide in advance whether volumes reduce, whether an alternative grade is offered, and how much notice you get.
Keep quality from drifting
Quality often slips once a relationship feels settled. Build in independent tests on every lot, an approval sample per shipment and the right to inspect. Read why quality drops after the first container.
Get the drafting right
Choose governing law and a dispute process that can actually be enforced against an Indian company. India is a party to the New York Convention on foreign arbitral awards, which is one reason many buyers choose arbitration. Your lawyer should advise on the seat, the rules and the wording. A bank can advise on the payment terms.
How we help
We run the trial orders, record how the processor performs, and help you set out the specification, volumes and price review in plain terms for your lawyer. Then we follow every shipment. Ask for a free sourcing review.