Government Mandates TReDS for CPSE MSME Invoice Settlement

Government Mandates TReDS for CPSE MSME Invoice Settlement

The Ministry of Micro, Small & Medium Enterprises has issued a notification dated 30 June 2026 mandating all operating Central Public Sector Enterprises (CPSEs) to route settlement of all invoices for goods and services procured from MSMEs exclusively through Trade Receivables Discounting System (TReDS) platforms authorized by the Reserve Bank of India. This measure implements a key commitment from the Union Budget 2026-27 aimed at addressing delayed payments that have constrained working capital for MSMEs.

Compliance and Transparency Requirements

CPSEs are required to disclose details of all MSME invoices routed and settled through TReDS platforms as specified by RBI regulations. Additionally, they must obtain a statutory auditor's certificate of TReDS registration and compliance during their annual audit, ensuring accountability and transparency in the payment process.

Impact on MSME Sector

The mandate affects India's extensive MSME sector, which comprises over 8.70 crore enterprises registered on the Udyam Registration Portal and Udyam Assist Platform, employing more than 38 crore persons. Through TReDS, MSME suppliers gain access to collateral-free, non-recourse working capital financing where banks and NBFCs bid competitively to discount invoices, enabling MSMEs to receive payments well before due dates at competitive interest rates.

TReDS Platform Growth and Operation

TReDS is an RBI-regulated electronic platform operational since 2017 that facilitates financing and discounting of MSME trade receivables from corporate buyers, government departments, and PSUs. Five platforms are currently operational: RXIL, M1xchange, Invoicemart, C2treds, and DTX. The platform has demonstrated significant growth, with invoice discounting volume increasing from ₹40,000 crore in FY 2021-22 to ₹3.47 lakh crore in FY 2025-26.

The government positions this mandate as establishing CPSEs as role models for timely payment discipline, creating a benchmark for large corporate buyers across India to follow in settling MSME invoices promptly.