Govt mandates TReDS for CPSE-MSME payments to tackle delayed dues

New Delhi: The government has notified the mandatory use of the Trade Receivables Discounting System (TReDS) by all operating Central Public Sector Enterprises for the settlement of transactions with their MSME suppliers, in a decisive step to end the long wait for payments faced by the enterprises.

The Ministry of Micro, Small and Medium Enterprises (MSME) issued the notification dated 30 June 2026, giving effect to a key announcement of the Union Budget 2026-27.

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 MSME, public sector procurement will now work actively for the small supplier: procurement by CPSEs gets captured on TReDS, and timely payment to MSME will be ensured through invoice financing from banks and financial institutions.

"With every CPSE invoice flowing through TReDS, MSME suppliers have the option to convert approved invoices into cash well before the due date," the MSME Ministry stated.

TReDS is an RBI-regulated electronic platform, operational since 2017, for financing and discounting the trade receivables of MSMEs due from corporate buyers, Government Departments and Public Sector Undertakings, through competitive bidding by multiple financiers.