SUPPLY CHAIN INNOVATION THROUGH TRADE RECEIVABLES DISCOUNTING SYSTEM (TREDS) DRIVING MSMES GROWTH IN DEVELOPING INDIA.

DOI: https://doie.org/10.65985/APER.2026390470

Authors:

Dr. Vikram R. Hande, Dr. Madhvi Dhole

Keywords:

Trade Receivables Discounting System (TReDS), Supply Chain Innovation, Working Capital, Micro, Small, and Medium Enterprises (MSMEs), Startups

Abstract:

Globalization has transformed the way businesses source and deliver products across the world. A Global Supply Chain includes a network of interconnected firms, suppliers, manufacturers, logistics providers, and distributors that operate across multiple countries to produce and deliver goods or services to end consumers. India, a developing country with a strong-growing industrial base, relies largely on Micro, Small, and Medium Enterprises (MSMEs) to promote employment, exports, and inclusive economic growth. Supply chain finance is a service that uses technology to manage financial flows within a supply chain, helping to improve working capital for both buyers and suppliers. Currently, it is a major issue for MSMEs that limitations on working capital have become a significant barrier for their growth. The Reserve Bank of India introduced the Trade Receivables Discounting System (TReDS), a digital supply chain finance innovation to improve MSMEs working capital, efficiency, and growth. This research investigates adoption of TReDS improves working capital of MSMEs, how this innovation has provided multiple business opportunities for the Startups. The study proposes a co-creation model developed by the researcher to explain value creation among stakeholders in the TReDS ecosystem. The model highlights the roles of MSMEs, buyers, financiers, and platform operators, and integrates AI and IoT to enhance real-time tracking, credit risk assessment, transparency, and working capital efficiency, resulting in economic growth of MSMEs and supporting the development of the Indian economy. The findings indicate that supply chain financing in India is undergoing a transition from traditional models to digitally enabled supply chains, thereby creating significant opportunities for emerging Startups.

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