Union Budget 2026 reforms reinforce TReDS
Watch the landmark announcement at Union Budget 26 by Finance Minister Nirmala Sitharaman
Collectively, these reforms mark a shift from episodic liquidity relief to a durable, rule-based financing ecosystem, benefiting MSMEs, corporates, financiers, and the broader supply-chain economy through transparency, speed, and balance-sheet efficiency.
In the Union Budget 2026, Finance Minister Nirmala Sitharaman outlined a comprehensive reform agenda to structurally strengthen MSME financing by addressing long-standing inefficiencies in receivables, credit access, and risk distribution. The Budget positions liquidity not as a standalone intervention, but as a system-level outcome enabled through regulation, data integration, and market participation.
A central reform mandates Central Public Sector Enterprises (CPSEs) to settle all MSME procurement payments through the Trade Receivables Discounting System (TReDS). This transition from mandatory onboarding to mandatory settlement formalises TReDS as a national payment and financing infrastructure rather than a voluntary platform, ensuring predictable invoice flows and faster cash realisation for MSMEs.
To further deepen credit access, the Budget introduces CGTMSE-backed credit guarantees for TReDS transactions, directly addressing financier risk appetite and enabling broader participation across buyer credit profiles. This is reinforced by the integration of TReDS with the Government e-Marketplace (GeM), creating a verified data pipeline that improves invoice authenticity, reduces fraud risk, and accelerates financing decisions.
Beyond receivables financing, the Budget advances MSME growth through equity and structural support mechanisms, including a ₹10,000 crore SME Growth Fund for high-potential enterprises, continued capital support for micro enterprises, and the rejuvenation of 200 legacy industrial clusters through infrastructure and technology upgrades. The proposal to treat TReDS receivables as asset-backed securities further signals the government’s intent to unlock secondary liquidity and institutional capital.
Collectively, these reforms mark a shift from episodic liquidity relief to a durable, rule-based financing ecosystem, benefiting MSMEs, corporates, financiers, and the broader supply-chain economy through transparency, speed, and balance-sheet efficiency.
During Budget 2024 speech, Finance Minister Nirmala Sitharaman emphasized the importance of supporting MSMEs by making access to working capital more inclusive and efficient. She announced the reduction of the mandatory threshold for TReDS onboarding from ₹500 crore to ₹250 crore, allowing more mid-sized businesses to benefit from platforms like M1xchange TReDS.
“This adjustment is aimed at providing MSMEs with timely access to liquidity, which is crucial for their growth and financial stability. By broadening the scope of TReDS, we aim to enhance transparency, improve cash flows, and foster a healthier business environment for small and medium-sized enterprises across India,” Sitharaman said during her speech.
This regulatory move opens doors for more businesses to join M1xchange TReDS, giving them access to a secure and efficient platform that promotes liquidity, transparency, and better supplier relationships.
During Budget 2024 speech, Finance Minister Nirmala Sitharaman emphasized the importance of supporting MSMEs by making access to working capital more inclusive and efficient. She announced the reduction of the mandatory threshold for TReDS onboarding from ₹500 crore to ₹250 crore, allowing more mid-sized businesses to benefit from platforms like M1xchange TReDS.
“This adjustment is aimed at providing MSMEs with timely access to liquidity, which is crucial for their growth and financial stability. By broadening the scope of TReDS, we aim to enhance transparency, improve cash flows, and foster a healthier business environment for small and medium-sized enterprises across India,” Sitharaman said during her speech.
This regulatory move opens doors for more businesses to join M1xchange TReDS, giving them access to a secure and efficient platform that promotes liquidity, transparency, and better supplier relationships.
M1xchange TReDS is your gateway to faster payments and streamlined working capital. As India’s leading TReDS platform regulated by the RBI, we connect with a network of financiers to simplify invoice discounting and ensure efficient cash management.
Fill out the form below to begin your journey with M1xchange TReDS. Our team will guide you through every step of the onboarding process, making the transition smooth and seamless.
By facilitating timely payments to MSMEs, corporates can enhance their cash flow and reduce the risk of late payment penalties.
M1xchange can strengthen relationships with vendors by providing them with faster access to working capital, which can lead to improved supplier loyalty and performance.
By utilising M1xchange, corporates can effectively extend their days payable outstanding (DPO), which can improve their cash flow position and reduce the cost of borrowing.
For corporates with excess funds, M1xchange can offer opportunities to earn arbitrage income.
By facilitating faster payments to suppliers, corporates can reduce the cost of their working capital financing needs, as they may be able to negotiate better terms with their lenders.
Seamless digital and paperless onboarding process that enables businesses to get started quickly, reducing delays and simplifying documentation.
Dedicated training and end-to-end support to ensure seamless process management.
Advanced security protocols safeguard sensitive business and financial data, ensuring complete confidentiality and compliance.
Access financing without providing collateral, with non-recourse funding that protects sellers from buyer default risk.
Invoice discounting through the platform allows funding without impacting balance sheets, helping maintain strong financial credibility.
Fast and efficient processing ensures funds are disbursed within 24 hours*, improving liquidity and cash flow management.
Multiple financers to ensure competitive bidding resulting in attractive low rates, significantly reducing financing costs.
