Govt mandates CPSEs to route MSME invoice settlements through TReDS
Jul 10, 2026
Revised MSME Ministry guidelines require all operating CPSEs to settle MSME procurement invoices through RBI-regulated TReDS platforms to ensure timely payments
In line with the Union Budget 2026-27 announcement, the government has made it mandatory for all Central Public Sector Enterprises (CPSEs) to route the settlement of invoices related to procurement from Micro, Small and Medium Enterprises (MSMEs) through the Trade Receivables Discounting System (TReDS). The Ministry of MSME notified the revised guidelines on June 30, 2026, requiring all operating CPSEs to onboard RBI-regulated TReDS platforms and settle MSME invoices through them. The move is aimed at ensuring timely payments to MSMEs and strengthening the TReDS ecosystem.
Under the guidelines, CPSEs must disclose details of invoices routed and settled through TReDS in the form and manner specified by the Reserve Bank of India (RBI). They are also required to obtain a certificate from their statutory auditors confirming registration on at least one TReDS platform and compliance with the notification.
TReDS is an electronic platform regulated by the RBI that facilitates the financing and discounting of trade receivables of MSMEs by multiple financiers. Invoice financing through the platform has grown from about Rs 40,000 crore in FY22 to Rs 3.47 lakh crore in FY26, according to the Ministry of MSME.
The government expects the revised guidelines to improve access to working capital for MSMEs by promoting greater use of invoice financing on RBI-regulated platforms. Discounting of invoices remains optional for MSME suppliers.
"This is a step forward for MSMEs, but the mandate should be extended further. While most central PSUs are already making timely payments, the real delays occur at the ministry level, with state PSUs, and electricity boards. The government should make TReDS mandatory for them as well. Greater participation from the private sector is also essential for the platform to achieve its full potential," said Anil Bharadwaj, secretary general of the Federation of Indian Micro and Small & Medium Enterprises (FISME).
According to the ministry, MSMEs are the backbone of the Indian economy, with over 8.70 crore enterprises registered on the Udyam Registration Portal and Udyam Assist Platform, providing employment to more than 38 crore persons. Yet delayed payments remain one of the sector's most persistent challenges, locking up working capital and constraining growth. By making TReDS the settlement route for all CPSE purchases from MSMEs, public sector procurement will now work actively for small suppliers: Procurement by CPSEs gets captured on TReDS, and timely payment to MSMEs will be ensured through invoice financing from banks and financial institutions.
[The Business Standard]
