B2B Procurement Guide India 2026
Everything Indian SMEs need to know about B2B procurement — RFQ, MOQ, GST invoicing, credit terms, supplier verification, and Protected Payment — in one place.
The B2B Procurement Process — Step by Step
Define your requirement
Product name + specification (grade, size, material), quantity and unit (MT, kg, pieces), delivery location (city or PIN code), required date, budget range (optional but gets better quotes), quality certifications needed (ISI, BIS, ISO, FSSAI).
Post to multiple verified suppliers
Send your RFQ (Requirement) to at least 3–5 suppliers simultaneously. On VyaparSethu, post once and receive competitive quotes from multiple verified suppliers — no need to contact each one separately.
Compare quotes on all dimensions
Compare quotes on price per unit, MOQ, lead time, GST-inclusive total, payment terms, and Trade Confidence Score. The cheapest quote is not always the best — factor in lead time reliability and supplier score.
Verify the shortlisted supplier
Check GSTIN on search.gst.gov.in, confirm Udyam Registration if MSME, request a sample invoice, and start with a small sample order for new suppliers.
Issue a Purchase Order
Issue a written PO specifying all agreed terms before the supplier begins production. This is your legal protection if terms change later.
Pay safely
For new suppliers: use Protected Payment (funds held until delivery confirmed). For trusted suppliers: agree credit period in the PO (Net 30, Net 60 within MSMED Act limits).
Confirm delivery and rate the supplier
Inspect goods against PO specification. Confirm on VyaparSethu to release Protected Payment. Rate the supplier — your rating improves the Trade Confidence Score for future buyers.
Key B2B Procurement Terms
RFQ (Request for Quotation)
A formal request sent to multiple suppliers asking for price, lead time, and terms. On VyaparSethu, called a "Requirement". Post once, receive multiple competitive quotes.
MOQ (Minimum Order Quantity)
The smallest quantity a supplier will accept per order. Exists because suppliers have fixed setup costs. Always confirm MOQ before shortlisting a supplier.
Lead Time
Total time from order placement to delivery, including manufacturing, packaging, and shipping. For custom products: 2–8 weeks. For stock items: 1–5 days.
Credit Period
Days allowed to pay after receiving goods — e.g., Net 30, Net 60. For MSME suppliers, the MSMED Act caps credit at 45 days.
Protected Payment
Buyer funds held in a regulated account until delivery is confirmed. Eliminates advance fraud. VyaparSethu uses Razorpay's RBI-approved nodal account.
Purchase Order (PO)
A legally binding document committing the buyer to purchase at agreed price, quantity, and delivery date. Always issue a PO before production begins.
HSN Code
Harmonised System of Nomenclature code on every B2B invoice. Determines the GST rate. Wrong HSN = wrong tax rate = ITC claim rejection.
Input Tax Credit (ITC)
The GST you pay on purchases can offset the GST you collect on sales. Only valid when the supplier's invoice is GST-compliant with correct GSTIN and HSN code.
Trade Confidence Score
VyaparSethu's 0–100 score for each supplier based on payment history, delivery punctuality, response speed, repeat orders, and dispute rate.
FOB (Free on Board)
Supplier responsibility ends when goods are loaded on the vessel at origin port. Buyer arranges freight and insurance beyond that. Common in exports.
GST in B2B Procurement
Every B2B purchase in India generates a GST tax invoice. For registered buyers, the GST paid is recoverable as Input Tax Credit (ITC) — reducing your effective cost. This makes GST cost-neutral for registered B2B buyers.
| Transaction Type | GST Component | ITC Claimable |
|---|---|---|
| Intra-state (same state) | CGST + SGST (split equally) | Yes — if buyer is GST registered |
| Inter-state (different state) | IGST (full rate) | Yes — if buyer is GST registered |
| Exempt goods (e.g., fresh produce) | None | N/A |
| Composition scheme supplier | No GST on invoice | No ITC for buyer |
Use VyaparSethu's free GST Calculator and HSN Code Lookup before finalising any supplier quote.
Frequently Asked Questions
What is the procurement process for Indian SMEs?
The B2B procurement process for Indian SMEs: (1) Identify requirement with specification, quantity, and timeline. (2) Post RFQ (Requirement) to multiple verified suppliers. (3) Compare quotes on price, lead time, MOQ, and supplier score. (4) Select supplier and issue Purchase Order. (5) Pay via Protected Payment for first-time suppliers. (6) Confirm delivery and release payment. (7) Rate the supplier for future reference.
What documents are needed for B2B procurement in India?
Documents for Indian B2B procurement: GST-compliant tax invoice (with GSTIN, HSN code, CGST/SGST or IGST breakdown), Purchase Order (issued by buyer before production), Delivery Challan (goods dispatch document), E-way bill (for goods above ₹50,000 in value), and for exports: Commercial Invoice + Packing List + Bill of Lading/Airway Bill.
How do I negotiate payment terms with a supplier in India?
Payment term negotiation depends on relationship stage. First order: aim for 30% advance + 70% on delivery, or use Protected Payment (best option). Established relationship: Net 30 or Net 60 credit period. MSME suppliers cannot extend beyond 45 days credit under MSMED Act. Offering advance payment for a discount (5–8% off) works well with trusted suppliers who have working capital constraints.
What is the difference between an RFQ and a Purchase Order?
An RFQ (Requirement) is a request for prices and terms — it is not a commitment. You send it to multiple suppliers. A Purchase Order is a legal commitment to buy from one selected supplier at agreed price, quantity, and delivery date. RFQ comes first; PO comes after you select a supplier.
Start Your First Verified Procurement
Post a Requirement in 90 seconds. Receive competitive quotes from GSTIN-verified suppliers. Pay safely via Protected Payment.
Post a Requirement — Free