We plan to bring eChai across 100 cities in India. It starts with eChai Startup Demo Day on 26 September, all in person. 11 cities confirmed, 304 founders registered. Any city that reaches 20 interested founders is on too. See your city
Access, sales & scenarios

Government pays slowly, how do I survive the cash-flow gap?

Assume 60-180 day payment cycles and price for it, don't win a tender that bankrupts you on working capital. Use TReDS platforms (RXIL, Invoicemart, M1xchange) to discount your accepted invoices into cash within days without collateral, since CPSEs above ₹250 crore turnover are now mandated to onboard TReDS. If a buyer stalls past the legal 45-day limit under the MSMED Act, file on the MSME Samadhaan / ODR portal to claim your dues plus interest.

Go deeper

2 resources, 2 link-checked.

🛠️ Tool
✓ Link checked India Freemium Advanced

The single biggest killer of government-selling startups is the payment gap, not the sale. TReDS is the RBI-regulated fix, turn accepted invoices into cash in days, and SIDBI's page is the authoritative, vendor-neutral explanation of how to use it.

TReDS, Bill Discounting to Survive Slow Government Payments (SIDBI)

From sidbi.in by SIDBI explainer + platform links

  • TReDS discounts accepted MSME invoices online with no collateral, at competitive financier-bid rates.
  • Three RBI-approved platforms operate in India, including RXIL (a SIDBI, NSE joint venture).
  • CPSEs above ₹250 crore turnover are mandated onto TReDS, so many government buyers already support it.
  • If a buyer defaults after discounting, liability sits with the buyer, not the supplying MSME.
Open sidbi.in →
📄 Article
✓ Link checked India Free Intermediate

The official source for the procurement quotas and price preferences that tilt government buying toward small firms. Combined with DPIIT relaxations, this is the structural advantage most founders don't know they can claim.

MSME Public Procurement Policy, 25% Purchase Mandate & Price Preference

From msme.gov.in by Ministry of Micro, Small & Medium Enterprises policy page

  • Every central ministry/PSU must procure at least 25% from Micro & Small Enterprises (mandatory since 1 April 2015).
  • Sub-targets reserve 4% for SC/ST-owned and 3% for women-owned MSEs within that 25%.
  • An MSE quoting within L1+15% can match L1 and supply up to 25% of the tendered value.
  • 358 items are reserved for exclusive procurement from MSEs, register on Udyam to qualify.
Open msme.gov.in →

Terms in this answer

Working Capital

People also ask

How do I actually sell to the government, where do I find the buyers? 3 → What is GeM and how do I get my product listed on it? 2 → How do government tenders and procurement actually work for a tiny startup? 3 → Do I need certifications or empanelment to sell to a ministry? 2 → I'm a DPIIT-recognised startup, what procurement relaxations do I actually get? 3 → Are there quotas or preferences that tilt tenders toward small players like me? 2 →
eChai Partner Brands