Government Moves To Accelerate MSME Payments Through TReDS Mandate
ECONOMY & POLICY

Government Moves To Accelerate MSME Payments Through TReDS Mandate

The government has announced a mandate to expand the use of the Trade Receivables Discounting System, TReDS, to accelerate payments to micro, small and medium enterprises. The measure is designed to shorten receivable cycles and to strengthen liquidity for suppliers across sectors. Under the proposal, buyers and financiers will route eligible invoices through registered TReDS platforms so that invoices can be discounted and settled faster than under conventional payment terms.

The rule is intended to make cash conversion more predictable for smaller firms that often face long payment delays from larger corporates and public sector purchasers. TReDS platforms will provide a marketplace where financiers and investors can bid to purchase receivables, reducing dependency on traditional bank lending. Faster conversion of invoices into cash is intended to ease working capital constraints and to lower the cost of short term credit for suppliers.

The policy also aims to broaden access to formal credit for firms that are currently reliant on informal financing arrangements. Implementation will rely on strengthened regulatory oversight of TReDS operators and on wider onboarding of buyers and sellers onto digital platforms. Regulators will monitor compliance and will work with industry bodies to ensure interoperability between systems and to reduce onboarding friction.

The mandate will require changes in corporate procurement practices and in internal payment cycles for large buyers to align with electronic settlement processes. The government will provide guidance and support measures to help smaller firms adopt digital invoice financing and to streamline registration on TReDS platforms. Broader uptake of TReDS is intended to accelerate the formalisation of supply chains and to smooth cash flows across tiers of suppliers.

The government has announced a mandate to expand the use of the Trade Receivables Discounting System, TReDS, to accelerate payments to micro, small and medium enterprises. The measure is designed to shorten receivable cycles and to strengthen liquidity for suppliers across sectors. Under the proposal, buyers and financiers will route eligible invoices through registered TReDS platforms so that invoices can be discounted and settled faster than under conventional payment terms. The rule is intended to make cash conversion more predictable for smaller firms that often face long payment delays from larger corporates and public sector purchasers. TReDS platforms will provide a marketplace where financiers and investors can bid to purchase receivables, reducing dependency on traditional bank lending. Faster conversion of invoices into cash is intended to ease working capital constraints and to lower the cost of short term credit for suppliers. The policy also aims to broaden access to formal credit for firms that are currently reliant on informal financing arrangements. Implementation will rely on strengthened regulatory oversight of TReDS operators and on wider onboarding of buyers and sellers onto digital platforms. Regulators will monitor compliance and will work with industry bodies to ensure interoperability between systems and to reduce onboarding friction. The mandate will require changes in corporate procurement practices and in internal payment cycles for large buyers to align with electronic settlement processes. The government will provide guidance and support measures to help smaller firms adopt digital invoice financing and to streamline registration on TReDS platforms. Broader uptake of TReDS is intended to accelerate the formalisation of supply chains and to smooth cash flows across tiers of suppliers.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

Hexalog Appoints Vishal Shukla as Chief Transformation Officer

Hexalog, a cross-border supply chain and logistics company, has appointed Vishal Shukla as Chief Transformation Officer (CTO) to lead its operational transformation, technology adoption and expansion into new international markets.In his new role, Shukla will oversee the company's transformation strategy across operations, technology, product development and business expansion. His responsibilities include standardising processes, developing scalable operating models, strengthening existing trade corridors and introducing new fulfilment solutions for cross-border businesses.Shukla brings nearl..

Next Story
Real Estate

Dhuleva Group Awards 80-Storey Tower Contract to Eversendai

Dhuleva Group has awarded the core and shell structural construction contract for Dhuleva One50, an upcoming 80-storey ultra-luxury residential tower in South Mumbai, to Malaysia-based engineering and construction company Eversendai.Located near the Babulnath district, the development is planned as a high-rise residential landmark offering panoramic views of the Arabian Sea and Mumbai's skyline. The project will combine contemporary architecture with advanced engineering and premium residential facilities.Eversendai will undertake the structural construction works, drawing on its experience in..

Next Story
Building Material

Nuvoco Marks 10 Years, Targets 35 MMTPA Capacity by FY28

Nuvoco Vistas Corporation Limited is celebrating a decade of operations under the theme ‘Dus Saal Bemisaal’, highlighting its expansion in India's building materials sector. The company has grown from a single cement manufacturing facility into a diversified organisation operating across cement, ready-mix concrete (RMC) and modern building materials.The company's journey began in 2014 when its parent, Nirma Group, commissioned a 2 million metric tonnes per annum (MMTPA) greenfield cement plant at Nimbol, Rajasthan. A major milestone followed in October 2016 with the acquisition of Lafarge ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code