Normal payment terms for an Indian marketing supplier, and the 45 day rule behind them

Payment terms in Indian marketing engagements are negotiated as if they were purely commercial, and for one large category of supplier they are not. If your supplier is a registered micro or small enterprise, a specific statutory position applies to how long you may take to pay, and it is published on the government portal that handles the complaints. Here is what is customary, what the rule says, and how to use it from either side of the invoice.

What is customary in this market

• Monthly retainers billed in advance for the coming month, or within the first week of it. This is the most common arrangement and the easiest to administer.
• Projects split into milestones, typically an advance on signature, a payment at a defined midpoint and the balance on acceptance. The advance exists because small suppliers carry the production cost.
• Media spend paid separately and usually in advance, because the supplier is funding the platform on your behalf if it is not. Never let media spend and fees sit on one line.
• Payment windows of 30 days from invoice are normal for private companies, with larger buyers and group structures often working to longer internal cycles.

None of that is a rule. What follows is.

The statutory position for a registered micro or small supplier

The Ministry of Micro, Small and Medium Enterprises runs MSME Samadhaan, a delayed payment monitoring system at samadhaan.msme.gov.in. We fetched it on 22 October 2026, HTTP 200, and it states the position in its own words.

On who may file: Any Micro or small enterprise having valid Udyam Registration can apply.

On the deadline and the consequence: The buyer is liable to pay compound interest with the monthly rests to the supplier on the amount at the three times of the bank rate notified by RBI in case he does not make payment to the supplier for his supplies of goods or services within 45 days of the acceptance of the goods or service rendered. The portal attributes that to Section 16.

On how fast a case moves: Every reference made to MSEFC shall be decided within a period of ninety days from the date of making such a reference, and the portal records that all 37 states and union territories have constituted their councils.

Three practical consequences follow, and they cut both ways.

If you are buying

1. Ask whether your supplier holds Udyam Registration, and record the answer. It changes the arithmetic of your own payment cycle and it is a one line question.
2. Agree an acceptance step. The 45 days runs from acceptance of the service rendered, so a contract that never defines acceptance leaves the start date arguable. Define it: a deliverable is accepted when you confirm it or after a stated number of days without objection.
3. Do not agree a payment period you do not intend to keep. A long window written into a contract does not make a statutory position disappear, and it does guarantee an awkward conversation.

If you are selling

1. Register if you qualify. Udyam Registration is the precondition for using the portal at all.
2. Make acceptance explicit in your own contract, because your clock starts there.
3. Use the public pendency reports as a credit check. The portal publishes case data by state, by district, by central ministry, by department and by public sector undertaking. Before you take on a large buyer with a long payment reputation, that is free, official information about how they pay.

That last point is the one almost nobody uses and it is the most valuable thing on this page. It is a public record of payment behaviour, maintained by the government, and it is available before you sign rather than after you chase.

The tax and invoicing lines to settle in the contract

State the invoicing entity, the currency, what the invoice will show, and the payment window. What the tax treatment is for your company, including anything recoverable, is a question for your own accountant and it is far cheaper to ask before signing than after the first payment run. Keep media spend on a separate line from fees so that a cut to one is not a renegotiation of the other.

Why the payment conversation is worth having early

On 22 October 2026 we put a 198 question set of Indian buying questions to ChatGPT and Gemini, with the market fixed inside the prompt because the country parameters on the search API are accepted and then ignored. In the 64 blind readings, the engines cited Indian government hosts in 8 of them, including the tax information and GST portals and dcmsme.gov.in, the MSME host. So official Indian sources are inside the material these answers are built from, and a buyer or supplier asking an assistant about payment terms here may well be answered partly from them.

What the engines will not do is tell you whether your specific counterparty is registered, or whether cases have been filed against them. Both are checkable in minutes and neither appears in any answer.

What Indian buyers and suppliers ask about payment terms

Is 45 days a maximum for everybody? The portal states the position for a registered micro or small supplier. For other suppliers the period is what the contract says, which is why the contract should say it.

Does an advance payment change the position? An advance is for work not yet done. The statutory clock concerns payment after the service is rendered and accepted, so the two are separate questions.

Can we agree a longer period in writing? You can write whatever both parties sign, and a statutory position is not displaced by a preference. If a long cycle is unavoidable in your business, say so during selection so suppliers can price it.

What if the supplier is a company rather than an MSME? Then the terms are commercial. Agree them explicitly, including what happens on late payment, because without a clause there is no agreed consequence.

Is any of this legal advice? No. We have quoted a government portal with the date we read it, and the application to your contract is a question for your own lawyer and accountant.

The other thing to settle before the first invoice

Payment terms are one of six items worth settling during selection rather than after. The others are ownership of accounts and content, governing law, data handling, notice and work in progress, and the single number the engagement is judged on. The last of those needs a starting reading, which AI Knows Us keeps across ChatGPT, Gemini, Perplexity, Claude and Google AI Overviews, reporting which answers cited your pages and which named your business. In India that plan is Rs 11,799 a month, read from aiknowsus.com on 22 October 2026.

For the document side of selling to larger Indian buyers, including what procurement asks for before a payment cycle is even discussed, see our page on the documents Indian procurement asks a marketing supplier for.