GeM and TReDS Link-Up: Faster Invoice Finance for MSMEs
Why in the news
On 12 July 2026 an official said the government would connect GeM with TReDS, giving MSMEs a single flow from order to invoice to finance. It follows the MSME Ministry’s 30 June 2026 order that central public sector enterprises must clear MSME bills through TReDS. That order delivers part of the 4-pillar TReDS reform package in Union Budget 2026-27.
Key facts
- Plan: link GeM and TReDS so no platform switch is needed.
- Mandate: all CPSEs to settle MSME invoices through RBI-regulated TReDS (notified 30 June 2026).
- Origin: TReDS reform package announced by FM Nirmala Sitharaman in her ninth straight Budget.
GeM and TReDS compared
| Feature | GeM | TReDS |
|---|---|---|
| Start | 9 August 2016 | 2017 (RBI framework notified December 2014) |
| Role | National public procurement portal for Central and State departments, PSUs and autonomous bodies | Electronic platform to discount trade receivables of MSMEs selling to large buyers |
| Authority | Ministry of Commerce and Industry (nodal); CEO Ajay Bhadoo as of 2026 | Regulated by RBI |
About GeM
- It came out of restructuring DGS&D into a GeM SPV.
- Public Procurement Policy 2012: Centre and CPSEs must buy at least 25% yearly from MSMEs (raised from 20% in 2018).
- Within that, 4% is reserved for SC/ST-owned MSMEs and 3% for women-owned MSMEs.
How TReDS works
- The MSME uploads an accepted invoice.
- Banks and NBFCs bid competitively to discount it.
- The MSME takes the best bid and is paid within 24-48 hours, at a discount.
- The financier recovers the full invoice value from the buyer on the due date.
- MSME must be registered on the Udyam portal.
- Finance is without recourse: the MSME is not liable if the buyer defaults.
- Typical discount rate 7-11% APR; no collateral or minimum turnover is needed.
Account Aggregator framework
- RBI-regulated (Master Direction 2016, launched 2021); a consent-based way to share financial data between FIPs and FIUs.
Exam angle
- Regulator of TReDS: RBI; nodal ministry for GeM: Commerce and Industry.
- Numbers: 25% procurement target, 4% SC/ST, 3% women.
- TReDS finance is without recourse to the seller.