India to import 20,000 tonnes of currency paper

The Dollar Business Bureau

The lack of cash in the economy after demonetisation is expected to be fixed with the government issuing high-volume limited tender to import currency paper from different foreign firms to be used by the country’s four security printing presses.

According to a Finance Ministry meeting, chaired by Economic Affairs Secretary Shaktikanta Das, the volume of the import order may stand at 20,000 tonnes. This is a huge number when compared to 8,000 tonnes of currency paper imported in the current year. The order is expected to fulfill the printing requirement of the economy for over a year.

As per officials in the ministry, it is not a very big import order as the country has always imported currency paper in the past.  But the scenario has changed with India manufacturing most of its currency paper.

Till now, India has seen a demand of 25,000 tonnes annually with the Reserve Bank of India (RBI) presses producing around 18,000 tonnes.

The economy so far had enough banknote paper for the printing of currency until mid-2017 considering the normal printing cycle. But replacement of old currency with the recent move of demonetisation has made it imperative for authorities to take this decision to facilitate increased printing of notes.  

After the announcement, principals of at least two foreign security paper manufacturing firms have shown interest to take up the project by visiting printing facilities in India.  The import order may also be distributed among a number of international players in order to rationalise the price of imports.

As per officials of the Finance Ministry and Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), the order will be split between nine foreign firms which have been given a green signal by the Home Ministry. The companies are Landquart from Switzerland; Komsco from South Korea; PWPW from Poland; Arjowiggins from France; Crane from Sweden; Goznak from Russia; PT Pura from Indonesia; Fabriano from Italy and Louisenthal from Germany.