"Some people (in India) have raised this question to us. We have asked them to provide details," Chinese economic and commercial counsellor in India Zhou Hao told PTI.

At least Rs 30 crore worth LoCs have not been honoured by Chinese seafood traders leading to Indian seafood exporters being asked not to enter into arbitrary export deals with traders in Beijing.

"Our people normally do not default any commitment. Our government will not allow such things," Hao said. Indian traders and officials would have to first provide details and China would then have to find out what went wrong before taking any further steps, he said.

"First, we will have to find out the versions on both sides and spot what has gone wrong," he said. Commerce ministry officials say the amount due to Indian seafood exporters could be more, but manyexporters had not come forward to disclose the amount due to them.

Indian officials had taken up the issue with the Chinese embassy and a senior Marine Products Export Promotion Authority (MPEDA) official had visited China to hold talks with the authorities there and solve the problem.

The LoC default occurred as Chinese market was hit by demand recession and traders being unable to realise anticipated margins.

Demand recession in China and exporters reluctance to ship more to Bejing has hit exports, which have declined by nearly 50 per cent during the first half of the current fiscal.

Marine products exports to China during April-October of the fiscal declined to 30,575 tonnes from 59,647 tonnes during the corresponding period of the previous fiscal. In value terms, the exports had dipped to $35.89 million against $70.80 million during the period.

Marine products exporters feel the chances of getting their LoC honoured were bleak as most of the deals did not have legal provisions to forcearbitration.

Commerce ministry officials said China had made it clear that only those LoCs which have provisions in the agreement for legal arbitration could be honoured.

LoCs with such provisions could be settled through the Chinese International Economic and Trade Arbitration Council.

As a precautionary measure, the commerce ministry has asked seafood exporters to enter into deals through reputed banks operating in the country.