TASMA Advocates 90-Day Payment Term for Textile MSME Sector

MSME News: MSME stands for Micro, Small, and Medium Enterprises. MSMEs are the large number of small businesses in India that manufacture and supply different products.

For example: – a manufacturing unit that manufactures buttons and zips for the garment industry. Or a food processing unit that manufactures inputs for dairy companies.

Earlier this month, a trade association, TASMA, requested a payment term extension for MSMEs.

Also read: – “Decoding the 45-Day MSME Payment Rule: Confusion, Concerns, and a Glimpse into the Future”

TASMA represents textile companies. MSMEs supply various raw materials to textile units.

TASMA approached that 90 days’ time should be provided to textile companies to clear payments against MSME vendors. They get a maximum of 45 days at present.

The reason is – cloth companies also get very long payment terms from their buyers. Therefore, by giving longer payment terms to MSMEs, cash flows can be managed more effectively in the entire industry.

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In simple words:

• MSMEs: Small enterprises that supply raw materials to big companies
• TASMA: Association of textile sector
• TASMA wants 90 days instead of 45 days payment term for MSMEs
• As textile units also get delayed payments from their customers
• This will help regulate cash flows for the entire textile sector

Read More: MSME Business News and SME Business News

Main Source: https://www.reuters.com/world/india/india-finance-minister-presents-interim-budget-202425-2024-02-01/

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