The Ministry of Micro, Small and Medium Enterprises (MSME) has notified mandatory use of the Trade Receivables Discounting System (TReDS) by all operational Central Public Sector Enterprises (CPSEs) for settling invoices raised by their MSME suppliers. Under the notification, CPSEs must settle all invoices for goods and services procured from MSMEs exclusively through RBI-authorised TReDS platforms.

The notification was issued on 30 June 2026, implementing an announcement made in the Union Budget 2026-27. The step is aimed at ending long-standing delays in payments to MSMEs and providing them quick, collateral-free working capital. CPSEs will also be required to publicly disclose details of MSME invoices routed and settled through TReDS, and to obtain a statutory auditor's certificate on their TReDS registration and compliance as part of their annual audit.

MSMEs form the backbone of the Indian economy, with over 8.70 crore enterprises registered on the Udyam Registration Portal and the Udyam Assist Platform, employing more than 38 crore people. Delayed payments have long been one of the sector's most persistent challenges, blocking working capital and slowing growth.

TReDS is an RBI-regulated electronic platform that has been operational since 2017. It enables MSMEs to discount their trade receivables from corporate buyers, government departments and PSUs, with banks and NBFCs bidding competitively to finance the invoices. The financing is collateral-free and extended on a "without recourse" basis to the seller. Five TReDS platforms currently operate: RXIL, M1xchange, Invoicemart, C2treds and DTX. Invoice discounting value on TReDS has grown sharply, from ₹40,000 crore in FY2021-22 to ₹3.47 lakh crore in FY2025-26.