5 Industries With Low TReDS Penetration, and the Working Capital They’re Leaving on the Table

TReDS has grown fast on paper. Invoice discounting on the platform rose from around ₹40,000 crore in FY22 to about ₹3.47 lakh crore in FY26, and the mechanism has unlocked more than ₹7 lakh crore in liquidity for MSMEs since it started (PIB). Yet industry estimates put the amount locked up in unpaid MSME receivables at any given time at over ₹10 lakh crore. The gap between what TReDS moves and what MSMEs are still owed is a sign that penetration is uneven, and some sectors are barely tapping the mechanism at all.

A SIDBI survey from May 2025 found that sectors like hotels, readymade garments, auto components and drugs and pharmaceuticals already show moderate to high digital presence, which should make them natural fits for a digital financing tool like TReDS (SIDBI). Digital readiness alone hasn’t translated into usage though. Five sectors in particular show low TReDS penetration relative to how exposed they are to payment delays, each for its own structural reasons.

Pharma. Small manufacturers often sell through several layers before an invoice is even raised against the final buyer, moving through C&F agents, stockists and distributors on the way to a hospital or a state procurement body. Government buyers, historically among the slowest to register on TReDS platforms, are only now being pulled in through the CPSE mandate that took effect on June 30, 2026, requiring every operating central public sector enterprise to settle MSME invoices through an RBI-authorised TReDS platform (Ministry of MSME notification via SCC Times). Until that mandate fully takes hold and extends to state-level buyers, a large share of pharma receivables against public health systems sits outside the platform.

Construction. Invoices in this sector are tied to milestone certifications and site measurements rather than a straightforward delivery note. That makes them slower to get to the “approved” stage TReDS needs before an invoice can be discounted. Contractors end up carrying receivables for months while a bill is measured, certified and sometimes re-measured, which keeps a lot of construction MSME debt out of the TReDS pipeline even when it is genuinely owed.

Agri-processing. This is a seasonal, cash-heavy, and often informal segment. Many buyers are smaller traders or aggregators rather than large corporates with the balance sheets and governance needed to onboard onto a TReDS platform, and a fair number of agri-processing units themselves aren’t formalised in a way that makes them eligible either. The result is a sector where working capital stress is high but platform usage stays thin.

Logistics. Fleet ownership here is fragmented down to single-truck and small-fleet operators, and freight invoices are routinely adjusted after the fact for detention charges, damage claims or short-loading. Financiers are cautious about discounting a bill that might still change, so a large share of the sector’s receivables never make it onto TReDS in the first place, even though logistics operators are exactly the kind of small, thinly capitalised businesses the platform was built for.

Textiles. A large share of textile MSME revenue is export driven, and TReDS is designed for domestic receivables from Indian corporate and government buyers. Export invoices to overseas retailers fall outside its scope entirely. That exposure has become more painful recently, with US tariffs on Indian goods squeezing order books in labour-intensive sectors like textiles (Whalesbook), leaving exporters with fewer levers to manage cash flow at a time they need more.

None of these are reasons TReDS can’t work for these sectors. They’re reasons it hasn’t reached them at scale yet, and each points to a fixable gap. Extending the CPSE mandate down to state PSUs, electricity boards and larger municipal bodies would open up pharma and construction receivables that currently sit with slow government buyers. Building in milestone-based invoice flows would let construction and infrastructure suppliers discount certified portions of a bill rather than waiting for full sign-off. Giving fragmented, high-frequency segments like logistics and agri-processing a simpler way to get smaller, high-volume invoices onto the platform would bring in receivables that are currently too small or too disputed to interest financiers.

The MSMEs in these five sectors are exactly the ones the ₹10 lakh crore payment delay problem hits hardest, since they combine long buyer chains, thin margins and limited access to formal credit. Closing the penetration gap sector by sector, not just chasing overall volume growth, is where TReDS has the most room to grow into the problem it was built to solve.

Also read: RBI’s New TReDS Master Direction: The Case for TReDS Just Got Stronger