MSME Development bill’s nod paves way for timely payments

NEW DELHI: The Lok Sabha on Friday passed without a debate a bill that seeks to empower and tackle the issue of delayed payments faced by micro, small and medium enterprises (MSMEs), amid protests by opposition members.

The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 has now been cleared by Parliament. It was passed in the Rajya Sabha on August 3. The Bill seeks to address the current challenges faced by the MSME sector by improving the administrative structure and facilitating payment mechanisms.

Provisions to deal with delayed payments to MSMEs by prescribing timelines to ensure faster adjudication of disputes, providing recovery of the settlement agreement, and addressing their liquidity issues are part of the Bill.

It also seeks to empower courts to order payment of at least 50% of the awarded amount to MSME suppliers if the application to set aside an order is pending for more than six months.

MSMEs contribute 31% to India’s GDP, 36% to the country’s manufacturing and 41% to its exports. “The outstanding credit disbursed to MSMEs, which stood at Rs 10 lakh crore in 2014-15, has today increased to over Rs 38.35 lakh crore, denoting that the credit flow to MSMEs is rising steadily,” MSME Minister Jitan Ram Manjhi had told the Rajya Sabha before the passage of the Bill in the Upper House on August 3.

MSMEs contribute 31% to India’s GDP, 36% to the country’s manufacturing and 41% to its exports. Outstanding credit disbursed to MSMEs from Rs 10 L-cr in 2014-15 has gone up to Rs 38.35 L-cr today

On Friday, opposition members continued with their protests in the Lok Sabha over various issues and the Zero Hour was disrupted. The House cleared the Bill in the nearly 16-minute proceedings after it met at 12 noon following the first adjournment of the day. Later, the Lower House was adjourned till Monday.

Meanwhile, issuance of certificates of origin, a key document to avail free trade agreement benefits, has more than doubled from 3.6 lakh in 2021-22 to over 7.8 lakh in 2026-27 so far, Parliament was informed on Friday.

The data indicates growing utilisation of India’s trade agreements and expanded market access opportunities for exporters, Minister of State for Commerce and Industry Jitin Prasada said in a written reply to the Rajya Sabha.

An exporter has to submit the certificate at the landing port of the importing country. The document is important to claim duty concessions under free trade agreements as they are essential to prove where the goods come from.

“India’s issuance of CoO more than doubled from 3.6 lakh in FY 2021-22 to over 7.8 lakh in FY 202627, indicating growing utilisation of India’s trade agreements and expanded market access opportunities for Indian exporters,” he said.

He informed India’s merchandise exports recorded a robust growth of 16%, increasing from $111.57 billion in April to ” June 2025-26 to $129.32 billion in April â June 2026-27.

“Merchandise exports to India’s FTA partner countries grew by 25% , rising from $34.65 billion to $43.14 billion during the same period,” he added. Consequently, Prasada said the share of FTA partners in the country’s total exports increased from 31.1% to 33.4% during the same period, highlighting the positive role of these pacts in supporting export growth and expanding market access. India has implemented trade agreements with the UAE, Australia, the EFTA bloc, Oman and the UK.