Addressing Exporter Concerns: Urgency for Exemption from MSME 45-Days Payment Mandate

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  • The recent implementation of a regulation mandating settlement of outstanding invoices owed to micro and small enterprises (MSMEs) within a 45-day timeframe has sparked considerable unrest among exporters from various sectors.
  • This article delves into the intricacies of the issue, highlighting the concerns raised by exporters and proposing viable solutions to navigate the challenges posed by the new mandate.

Key Concerns Raised by Exporters:

  • Cash Flow Implications: Exporters emphasize the adverse impact on their cash flow dynamics, citing the discrepancy between the mandated 45-day payment period and the customary 120-day timeline for export payments.
  • International Competitiveness: Rigid payment terms threaten to undermine the international competitiveness of Indian exporters, especially when compared to countries offering more lenient credit rates and payment terms.
  • Burden on MSMEs: While the regulation aims to address delayed payment issues faced by MSMEs, exporters argue that it inadvertently burdens their liquidity, potentially jeopardizing their viability.

Focus on Micro and Small Enterprises (MSMEs):

  • Importance of MSMEs: MSMEs play a crucial role in the export ecosystem, contributing significantly to India’s export performance.
  • Impact of Delayed Payments: Delayed payments pose a significant challenge for MSMEs, affecting their working capital and hindering their growth prospects.
  • Unintended Consequences: While the regulation seeks to protect MSMEs from delayed payments, exporters fear unintended consequences such as loss of business and potential return of goods due to increased financial strain.

Proposed Solutions by Exporters:

  • Extension of Payment Period: Exporters advocate for an extension of the payment period from 45 days to 120 days to better align with the realities of international trade.
  • Exemptions for MSME Transactions: They propose exemptions for transactions involving MSMEs, recognizing the need to strike a balance between protecting MSME interests and ensuring export competitiveness.
  • Gradual Reduction in Payment Duration: Exporters suggest a gradual reduction in payment duration over time to facilitate a smoother transition for all stakeholders.

Challenges in Handicrafts Sector:

  • Extended Credit Periods: The handicrafts sector faces unique challenges with credit periods often extending up to 180 days, necessitating a more flexible approach to payment regulations.
  • Complex Export Timelines: Export timelines in the handicrafts sector involve multiple stages, including shipping and payment realization, making adherence to a 45-day payment rule impractical.
  • Call for Temporary Exemptions: Stakeholders in the handicrafts sector call for temporary exemptions to accommodate industry-specific realities and ensure continuity of business operations.

Call for Collaborative Solutions:

  • Stakeholder Collaboration: Addressing export challenges requires collaboration between exporters, MSMEs, and policymakers to devise pragmatic solutions that uphold the interests of all parties.
  • Balancing Interests: It is imperative to strike a balance between facilitating MSME liquidity and maintaining export competitiveness to foster sustainable growth in the export sector.
  • Emphasis on Sustainable Growth: Emphasizing the importance of fostering sustainable growth and competitiveness in the export sector, stakeholders underscore the urgency of finding collaborative solutions to address the challenges at hand.


  • The urgency for exemption from the 45-day payment mandate underscores the critical need for collaborative action to address the concerns raised by exporters.
  • By prioritizing stakeholder dialogue and fostering a conducive regulatory environment, policymakers can devise pragmatic solutions that ensure the continued growth and competitiveness of India’s export sector.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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