India Mandates CPSEs Use TReDS for MSME Invoice Settlements

The Government of India mandated that all operating Central Public Sector Enterprises settle invoices for goods and services procured from Micro, Small and Medium Enterprises through the Trade Receivables Discounting System (TReDS). Issued on June 30, 2026, the notification implements a Union Budget 2026-27 announcement designed to combat delayed payments and improve access to collateral-free working capital for small businesses.

Under this framework, invoices are routed through Reserve Bank of India-authorized platforms where banks and non-banking financial companies competitively bid to discount them, allowing suppliers to receive funds before the payment due date. To ensure accountability, Central Public Sector Enterprises must disclose routing details according to regulatory guidelines and obtain statutory auditor certificates during their annual audits.

The Ministry of Micro, Small and Medium Enterprises expects this move to establish state-owned enterprises as role models for payment discipline across corporate India. The scale of the system has expanded significantly, with TReDS invoice discounting growing from Rs 40,000 crore in FY22 to Rs 3.47 lakh crore in FY26.