By Introduction: Supply chain finance (SCF) is a rapidly growing industry in India, as more and more companies are turning to innovative financing solutions to streamline their supply chain operations and improve cash flow. In this blog post, we’ll take a look at the evolution of SCF in India, highlighting key milestones and developments that have shaped the industry to date.
- The emergence of SCF in India can be traced back to the late 1990s, when large corporations and multinational companies began to explore new ways to manage their supply chain finances.
- In the early 2000s, the Indian government began to take notice of the potential benefits of SCF, and began to implement policies and regulations to support the growth of the industry.
- The introduction of the Goods and Services Tax (GST) in 2017 was a major milestone for SCF in India, as it helped to simplify and standardize the tax system, making it easier for companies to manage their supply chain finances.
- Another significant development was the launch of the Trade Receivables Discounting System (TReDS) in 2016, which is an electronic platform that enables small and medium-sized enterprises (SMEs) to access working capital financing through invoice discounting.
- The Reserve Bank of India (RBI) has also played a key role in the evolution of SCF in India, by issuing guidelines and regulations to ensure that the industry operates in a transparent and responsible manner.
- The Indian banking sector has also been a major driver of SCF growth, as more and more banks are offering specialized SCF products and services to their customers.
- The use of digital technologies, such as blockchain and artificial intelligence, is also becoming increasingly popular in the Indian SCF industry, as they enable greater transparency, security and efficiency.
- The Indian government’s “Make in India” initiative, which aims to promote domestic manufacturing and exports, has also been a key factor in the growth of the SCF industry.
- The COVID-19 pandemic has accelerated the adoption of SCF in India, as companies are looking for ways to manage their cash flow and mitigate supply chain disruptions.
- Finally, it is also important to note that SCF is not limited to large corporations and multinational companies, but also small and medium-sized enterprises (SMEs) are benefiting from the growth of SCF in India.
Conclusion: The evolution of supply chain finance in India has been driven by a variety of factors, including government policies and regulations, the emergence of new technologies, and the growing needs of companies to manage their supply chain finances. As the industry continues to grow and evolve, we can expect to see even more innovative solutions and products that help to improve the efficiency and effectiveness of supply chain finance in India. We at Sudaar, connect retailers to RBI approved financial institutions to facilitate access to finance, through SCF programs. To know more, connect with us at vin@sudaar.com
