New TReDS Mandate for CPSEs: Key Changes for MSME Payments

On 30 June 2026, the Ministry of Micro, Small and Medium Enterprises (MSMEs) issued a mandate requiring all operational Central Public Sector Enterprises (CPSEs) to use Trade Receivables Discounting System (TReDS) platforms for the settlement of MSME invoices.

The notification came into effect on 30 June 2026.

Background:

MSMEs often face delays in receiving payments for goods and services supplied, leading to working capital constraints and cash flow challenges. Although TReDS was introduced to facilitate faster payments and provide access to financing against receivables, its adoption among government-linked entities remained limited. By making TReDS the mandatory settlement route for CPSEs, the government aims to promote transparency, accountability, and faster payment processing.

Key Takeaways:

1. The mandate is issued under Sections 9 and 10 of the Micro, Small and Medium Enterprises Development Act, 2006.

2. Under the new mandate:

   • All operating CPSEs are required to route the settlement of invoices relating to the procurement of goods or services from MSMEs through any TReDS platform authorised by the Reserve Bank of India (RBI).

   • MSMEs retain the freedom to choose whether they want to discount their invoices or seek financing through the platform. The mandate applies to routing invoices through TReDS, not to compulsory financing.

   • CPSEs as well as any other authority, body, or entity notified by the Central Government, must disclose details of MSME invoices routed and settled through TReDS in the format prescribed by the RBI.

   • During annual audits, CPSEs are mandated to obtain certification from statutory auditors confirming registration on at least one TReDS platform and compliance with the notification.

3. While the notification makes TReDS the mandatory route for settlement of MSME invoices by CPSEs, it does not mandate invoice discounting.

4. MSMEs continue to have the option to avail financing against their receivables or simply use the platform for settlement.

5. The mandate is expected to improve payment efficiency, enhance transparency, and facilitate greater access to financing opportunities for MSMEs.

Also Read: From Pending Disputes Worth Crores to ADR Mechanisms: Experts deliberate on Arbitrations Involving State-Owned Entities and MSMEs at Global ADR Summit 2026

[Notification Mandating TReDS for CPSEs, dt. 30-6-2026]