India Tightens MSME Payment Rules, Requiring 50% Award Payout After 6-Month Appeals
Updated
Updated · The Economic Times · Aug 24
India Tightens MSME Payment Rules, Requiring 50% Award Payout After 6-Month Appeals
1 articles · Updated · The Economic Times · Aug 24
Summary
India’s amended MSME framework will speed dues recovery by letting courts order payment of 50% of an arbitral award if an appeal stays pending beyond six months.
The overhaul also lets states add facilitation councils beyond the current 161, sets defined mediation and arbitration timelines, and allows dues recovery as arrears of land revenue.
All CPSEs will have to use TReDS for MSME procurement invoices, extending a platform whose settlements jumped from Rs 40,000 crore in 2021-22 to Rs 3.5 lakh crore in 2025-26.
Khera said the ministry is using a soft nudge rather than new compliance mandates to push large companies toward timely payments, while online systems such as Samadhan track disputes digitally.
The payment reforms sit within a broader MSME push: formal registrations have risen to 92 million, credit has expanded to Rs 38 lakh crore, and policy focus is shifting toward global competitiveness.