Building BusinessServices

Section 13

Raw material & machinery

कच्चा माल और मशीनें

Where to buy, which machine to choose and how to trust a supplier before you pay. Every cluster below is named in an official government list.

sourcing clusters
198
states
24
buying guides
5

Before you buy

01How to check a supplier before you pay
  1. Ask for the supplier's GSTIN and check it on the GST portal (services.gst.gov.in → Search Taxpayer). The legal name, trade name, address and status (Active or Cancelled) should match the invoice.
  2. Ask for the Udyam Registration Number and verify it on the Udyam portal (udyamregistration.gov.in → Verify Udyam). Check the enterprise name and the type of activity.
  3. Match the bank account name with the legal name on the GST record. Do not pay into a personal account for a company sale without a written reason.
  4. Visit the unit if you can, or ask a person you trust in that town to visit. See the machines, the stock and the workers yourself.
  5. Order a paid sample first. Keep one sample sealed and signed by both sides so you can compare later bulk supplies with it.
  6. Ask for two or three current buyers you can call. Ask them about quality, delivery time and how complaints were handled.
  7. Put the order in writing: item specification, quantity, price, taxes, delivery date, packing, freight, payment stages and what happens if goods are rejected.
  8. Pay a small advance and the balance after inspection or delivery wherever possible.
02How to compare machine quotations
  1. Send every supplier the same written requirement: product, output you need per hour or per shift, raw material, and the space and power you have.
  2. Compare the specifications line by line: capacity, motor power, material of the parts that touch the product, control system and the make of key parts.
  3. Check what the price includes: GST, packing, freight, transit insurance, unloading, foundation, installation, trial run and operator training.
  4. Read the warranty: how long it runs, which parts it covers, and who pays for the engineer's travel.
  5. Ask where spares and service come from, how fast an engineer can reach you, and for a price list of parts that wear out.
  6. Check the power the machine needs (single phase or three phase, connected load) against your electricity connection before you order.
  7. Ask for the names of buyers who run the same model and visit one running machine if you can.
  8. Check whether a BIS Quality Control Order or safety standard covers the machine (bis.gov.in) and ask the supplier for the certificate.
  9. Link payment to stages: advance, dispatch after inspection at the supplier's works, and the last part after successful installation.
03Buying second-hand machinery
  1. See the machine running under load, on your own material if possible. A machine that is only shown switched off is a risk.
  2. Take a mechanic or engineer you trust to check wear on the main shaft, bearings, gears, guideways, hydraulics, the motor and the control panel.
  3. Ask for the original purchase invoice, service records and the maker's name, model and serial number. Check that the seller owns it and that no bank loan or hypothecation is pending on it.
  4. Ask the original maker whether spares and service are still available for that model.
  5. Get a proper tax invoice for the sale. Banks and subsidy schemes often ask for it, and some schemes do not cover used machines, so read the scheme guideline first.
  6. Add the cost of dismantling, transport, foundation, re-installation and repair to the price before you compare it with a new machine.
  7. Importing a used machine has its own rules under the Foreign Trade Policy and customs. Check with DGFT and your customs broker before you pay a foreign seller.
04Raw material: price risk and storage
  1. Find out which of your raw materials changes price most often (for example metals, cotton, plastics granules or paper) and track its price every week.
  2. Keep at least two approved suppliers for each key material, so one delay or price jump does not stop your work.
  3. When you quote to your buyer, state how long the price is valid, or link it to the raw-material rate on the order date.
  4. For a long order, agree on the material price with your supplier for the same period, in writing.
  5. Do not buy far more stock than you need just because the price is low today. Stock ties up cash and can be damaged or stolen.
  6. Store material off the floor, away from damp and direct sun, with the oldest stock used first. Keep chemicals and flammable material apart, as their safety sheets say.
  7. Insure the stock in your godown and keep a simple stock register that you match with the physical count every month.
  8. Inspect every incoming lot against the agreed sample and specification before you accept it and before the supplier's truck leaves.
05Importing machinery
  1. You need an Importer-Exporter Code (IEC) from DGFT before you import (dgft.gov.in).
  2. Find the customs tariff heading (HS code) of the machine and check the duty and any import condition before you sign the order. A customs broker can help.
  3. If you will export goods made on the machine, read the EPCG (Export Promotion Capital Goods) scheme on the DGFT site. It lets you import capital goods without paying customs duty, against an export obligation, so read the obligation before you apply.
  4. Agree the Incoterm (for example FOB or CIF) so you know who pays freight and insurance up to which point.
  5. Ask for a pre-shipment inspection or a factory acceptance test, with photos and videos, before the balance payment.
  6. Check that the machine runs on Indian power supply (voltage and frequency) and that the manuals and control panel are in a language your team can read.
  7. Plan installation and service in India: does the maker have a local agent, how are spares supplied, and who pays the engineer's visit.
  8. Pay through your bank against proper documents (letter of credit or documents against payment) rather than a plain advance to an unknown seller.

Official help

Where India makes it

198 production clusters in 24 states, each named in ODOP, DGFT's Towns of Export Excellence or the MSE-CDP cluster list. Visit the cluster to meet many makers in one place.

Uttar Pradesh

Haryana

Rajasthan

Gujarat

Karnataka

Andhra Pradesh

Telangana

Delhi

Himachal Pradesh

Bihar

Assam

Tripura

Older MSE-CDP lists (1998–2012) show that a cluster existed, not that it is active today. Check locally.