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Government Makes TReDS Mandatory for All CPSU Payments
Pooja Srivastava
Any Time News Network
New Delhi: In a landmark reform aimed at ending chronic payment delays for Micro, Small and Medium Enterprises (MSMEs), the Government of India has made it mandatory for all Central Public Sector Enterprises (CPSUs) to settle invoices raised by MSME suppliers through the Trade Receivables Discounting System (TReDS), an RBI-authorized digital platform.
The notification, issued on June 30, 2026, implements a key announcement made in the Union Budget 2026–27. The reform is expected to significantly improve cash flow for millions of MSMEs by enabling faster, collateral-free access to working capital.
India has more than 87 million registered MSMEs, providing employment to over 380 million people. However, delayed payments have remained one of the biggest constraints affecting their growth. Under the new system, approved invoices can now be discounted through banks and financial institutions well before their due dates.
Banks and NBFCs will competitively bid to finance invoices, ensuring MSMEs receive funds quickly at competitive rates. The financing will be collateral-free and without recourse to the seller, reducing financial stress on small businesses.
The government has also directed all CPSUs to register on TReDS, publicly disclose invoice settlement details and obtain statutory audit certification for compliance, strengthening transparency and accountability across public procurement.
Currently, five RBI-regulated TReDS platforms are operational: RXIL, M1xchange, Invoicemart, C2TReDS and DTX. Invoice discounting through these platforms has grown dramatically from ₹40,000 crore in FY 2021-22 to ₹3.47 lakh crore in FY 2025-26, highlighting increasing adoption.
Industry experts believe the reform will significantly reduce working capital bottlenecks, strengthen MSME liquidity and establish a culture of timely payments across India’s public sector procurement ecosystem.
