CPSEs invoice discounting settlement TReDS Working Capital India 02-02-2026Mandatory TReDS settlement proposed for CPSEs in IndiaIn the Union Budget for FY27, the Centre proposed mandating the Trade Receivables Discounting System (TReDS) as the transaction settlement platform for all purchases made from micro, small and medium enterprises (MSMEs) by central public sector enterprises (CPSEs). The proposal aims to strengthen timely payments and improve access to affordable working capital for MSMEs.Presenting the Budget, Finance Minister Nirmala Sitharaman noted that TReDS platforms have already enabled MSMEs to receive financing of nearly ₹7 lakh crore (US$76.3bn). Making TReDS mandatory for CPSE procurement from MSMEs is expected to serve as a benchmark for the wider corporate sector.To further support liquidity, the Budget introduced a credit guarantee support mechanism through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for invoice discounting on TReDS platforms. The government also proposed linking the Government e-Marketplace (GeM) with TReDS to facilitate information sharing with financiers on government purchases from MSMEs, enabling quicker and lower-cost financing.In another significant step, trade receivables on TReDS are proposed to be treated as asset-backed securities, paving the way for the development of a secondary market and enhanced liquidity.Industry participants welcomed the measures, stating that mandatory TReDS settlement by CPSEs would ensure timely payments, competitive financing rates, and greater transparency in MSME payment cycles. The extension of CGTMSE guarantees is expected to widen MSME participation on TReDS platforms, while securitisation of receivables could attract new investor classes.However, experts cautioned that delayed payments by large private buyers remain a major challenge, with over ₹8 lakh crore (US$ 87.4bn) still locked in overdue receivables. They suggested that a phased, broader mandate of TReDS for all credit-based MSME procurement could deliver more systemic relief. #invoice finance
In the Union Budget for FY27, the Centre proposed mandating the Trade Receivables Discounting System (TReDS) as the transaction settlement platform for all purchases made from micro, small and medium enterprises (MSMEs) by central public sector enterprises (CPSEs). The proposal aims to strengthen timely payments and improve access to affordable working capital for MSMEs.Presenting the Budget, Finance Minister Nirmala Sitharaman noted that TReDS platforms have already enabled MSMEs to receive financing of nearly ₹7 lakh crore (US$76.3bn). Making TReDS mandatory for CPSE procurement from MSMEs is expected to serve as a benchmark for the wider corporate sector.To further support liquidity, the Budget introduced a credit guarantee support mechanism through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for invoice discounting on TReDS platforms. The government also proposed linking the Government e-Marketplace (GeM) with TReDS to facilitate information sharing with financiers on government purchases from MSMEs, enabling quicker and lower-cost financing.In another significant step, trade receivables on TReDS are proposed to be treated as asset-backed securities, paving the way for the development of a secondary market and enhanced liquidity.Industry participants welcomed the measures, stating that mandatory TReDS settlement by CPSEs would ensure timely payments, competitive financing rates, and greater transparency in MSME payment cycles. The extension of CGTMSE guarantees is expected to widen MSME participation on TReDS platforms, while securitisation of receivables could attract new investor classes.However, experts cautioned that delayed payments by large private buyers remain a major challenge, with over ₹8 lakh crore (US$ 87.4bn) still locked in overdue receivables. They suggested that a phased, broader mandate of TReDS for all credit-based MSME procurement could deliver more systemic relief.