Delhi: The Government of India has made it mandatory for all Central Public Sector Enterprises (CPSEs) to settle invoices raised by Micro, Small and Medium Enterprises (MSMEs) through the Trade Receivables Discounting System (TReDS). The move, announced through a notification dated June 30, 2026, aims to ensure faster payments, improve transparency and provide MSMEs with easier access to working capital without collateral.
The decision fulfils a key commitment made in the Union Budget 2026-27 and is expected to streamline the payment process for lakhs of MSME suppliers working with public sector enterprises. Under the new framework, every operating CPSE will be required to process payments for goods and services procured from MSMEs through RBI-authorised TReDS platforms.
Along with adopting the platform, CPSEs will also have to disclose details of invoices processed through TReDS and secure statutory auditor certification confirming registration and compliance as part of their annual audit process. The government believes this requirement will strengthen accountability while encouraging timely payment practices across the public sector.
For MSMEs, the mandate is expected to significantly reduce payment delays that often strain business operations. Once an invoice is approved and uploaded to TReDS, suppliers can receive funds before the due date by having banks and non-banking financial companies competitively bid to finance the invoice. Since the financing is linked to the receivable, businesses can access working capital without providing collateral.
The government noted that India’s MSME sector includes more than 8.70 crore registered enterprises, providing employment to over 38 crore people. By integrating CPSE procurement with TReDS, authorities aim to unlock faster liquidity for small businesses while improving overall efficiency in public procurement.
Operational since 2017 under the regulation of the Reserve Bank of India, TReDS has steadily expanded its reach as a digital platform for financing trade receivables of MSMEs. According to the government, invoice discounting through the platform has grown sharply, increasing from ₹40,000 crore in FY 2021-22 to ₹3.47 lakh crore in FY 2025-26, reflecting wider industry adoption.
Officials believe the latest mandate will further strengthen the digital payments ecosystem, encourage prompt settlements and provide MSMEs with more predictable cash flow, enabling them to focus on growth and business expansion.
Source: This article is based on an official press release issued by the Press Information Bureau, Ministry of Micro,Small & Medium Enterprises, Government of India
Press Release Page | Press Information Bureau
