Medicinal plants and their products have been used virtually in all cultures as a source of medicine since time immemorial. In India, several plant species are used as a medicine and in recent years, the trade-in medicinal plants have increased several folds. However, with burgeoning demand for raw herbal products, there has been concern over the safety and efficacy of raw herbal material as well as herbal products that contain only the desired plant species or labeled plant's product. In the present investigation, an emphasis was made to evaluate the extent of species adulteration in the raw herbal trade of Momordica charantia which is commonly called “karela” and used as alternate herbal medicine in the treatment of type-2 diabetes in south India. DNA barcodes were developed for six authentic reference species of Momordica and for the eighteen samples purchased from major raw herbal material distributors of south India representing the raw herbal products of M. charantia sold as “karela” in India. The DNA barcodes were developed using the nuclear region of the internal transcribed spacer (ITS) and the chloroplast region matK of six Momordica species, the biological reference standard, and the raw herbal drug trade samples. The species-level authenticity of the herbal drug samples was assessed adopting two identification methods namely BLAST similarity-based identification and phylogenetic tree approach. Our results indicate that the market samples sold were mostly authentic M. charantia except three. The present study offers a novel and reliable DNA barcode sequence-based approach for screening the species authenticity of raw herbal drug market samples of M. charantia and we have discussed the implications of the study in the larger context of authentication in raw herbal trade.