The Union Budget 2026-27 positioned the Trade Receivables Discounting System (TReDS) at the centre of India’s MSME (micro, small, and medium enterprise) liquidity infrastructure, announcing four measures: mandatory TReDS settlement for central public sector enterprise (CPSE) purchases; Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) backed credit guarantees; Government e-Marketplace (GeM) integration; and securitisation of TReDS receivables as asset-backed securities. Policy intent, however, needs regulatory architecture to become operational. That architecture has arrived in June 2026 with the Reserve Bank of India (RBI)’s Master Directions for TReDS, the formal instrument that gives legal force to what the Union Budget proposed. Together, they signal the most substantive overhaul of the TReDS framework since its launch in 2014.
Two barriers, one reform agenda
