The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026

This Bill amends the Micro, Small and Medium Enterprises Development Act, 2006 to streamline the registration of MSMEs via digital platforms, mandate the use of the Trade Receivables Discounting System (TReDS) for invoice settlements by public sector enterprises, and establish strict timelines and enforcement mechanisms for resolving payment disputes through Facilitation Councils.

Micro, Small, and Medium Enterprises (MSMEs); Central and State Public Sector Enterprises; other authorities, bodies, or entities notified by the Central or State Governments; Micro and Small Enterprises Facilitation Councils; and courts.

• Defines 'Development Commissioner' as the administrative head of the office in the Ministry of Micro, Small and Medium Enterprises.
• Clarifies that investment in plant and machinery excludes costs for pollution control, R&D, and industrial safety devices.
• Mandates the Central Government to notify a national digital platform for free and voluntary MSME registration.
• Requires Central Public Sector Enterprises to route invoice settlements for goods/services procured from MSMEs through a Reserve Bank-authorized Trade Receivables Discounting System (TReDS) platform.
• Allows Central and State Governments to notify other entities or State Public Sector Enterprises to also use the TReDS platform for MSME invoice settlements.
• Sets a mandatory 90-day time limit for completing mediation and a 90-day limit for making an arbitral award after pleadings are completed.
• Grants jurisdiction to Facilitation Councils or mediation providers to act as mediators or arbitrators for disputes between suppliers (based on registered address) and buyers located anywhere in India.
• Permits the establishment of online mechanisms for mediation or arbitration via audio-video and electronic means.
• Allows mediated settlement agreements or arbitral awards to be recovered as arrears of land revenue by State Governments through District Collectors.
• Requires applicants (other than suppliers) to deposit 75% of the awarded amount with the court before filing an application to set aside a decree, award, or settlement agreement.
• Mandates that if a setting-aside application is pending for more than six months, the court must order at least 50% of the deposited amount to be paid to the supplier.
• Requires State Governments to establish adequate numbers of Micro and Small Enterprises Facilitation Councils with specific composition rules (3-5 members, including a Joint Director-level chairperson and legal representation).
• Requires Central and State Public Sector Enterprises and notified entities to disclose details of MSME invoices settled through the TReDS platform.

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