This initiative comes in light of increasing procurement activity via the Government e-Marketplace (GeM), with defence procurement through the platform surpassing ₹1 lakh crore in the previous financial year.
Experts believe that a broader adoption of TReDS could enable smaller suppliers to secure quicker working capital against approved invoices, ultimately enhancing formal credit penetration in the sector.
Sundeep Mohindru, Promoter & Director at M1xchange, a digital platform dedicated to TReDS, mentioned that this initiative could significantly benefit businesses involved in manufacturing components, engineering services, logistics, and other defence-related activities, where consistent cash flow is crucial for scaling operations and meeting project deadlines.
“The Ministry of Defence’s broader push for TReDS is genuinely encouraging for the smaller enterprises that drive India’s defence supply chain,” Mohindru stated. “TReDS is vital in providing faster access to funds against approved invoices, enabling suppliers to unlock working capital in a smooth and efficient way without the need for collateral-heavy methods.”
He further noted that major defence PSUs, including BEML, HAL, BEL, Hindustan Shipyard, and Mazagon Dock, are already engaged on the platform, and the ministry’s efforts are anticipated to deepen the adoption of digital trade finance solutions within the defence ecosystem.
According to Mohindru, an expanded use of TReDS could also promote transparency, enhance financial discipline, and support the formalization of financing practices among MSMEs. He suggested that increased participation from government-linked buyers and defence PSUs could position TReDS as a pivotal facilitator for initiatives like ‘Make in India’ and ‘Atmanirbhar Bharat’.
