New Delhi: India has taken its first formal step towards introducing polymer banknotes, with Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), the currency-printing arm of the Reserve Bank of India (RBI), inviting global Expressions of Interest (EoIs) for the supply of polymer substrate sheets embedded with advanced security features. The move marks the beginning of the process to evaluate polymer currency for India, although the RBI has not yet announced the denominations or timeline for their introduction.
The EoI invites eligible domestic and international manufacturers to submit bids by August 18 for the manufacture and supply of opacified polymer substrate sheets designed specifically for Indian banknotes.
Shift from paper to polymer currency
If implemented, polymer banknotes would represent a significant change in India’s currency system, which has relied on specialised paper banknotes for nearly a century.
Polymer notes are manufactured using durable plastic films that are more resistant to wear and tear than conventional paper currency. They generally have a longer circulation life, making them more cost-effective over time despite higher production costs.
The RBI has clarified that the current tender is only the first step in the procurement process and does not confirm when polymer banknotes will be introduced or which denominations will be printed on the new substrate.
Strict security norms for suppliers
The tender lays down stringent national security requirements for companies interested in supplying polymer substrate sheets.
Prospective bidders must obtain security clearance from the Government of India and ensure that any operations in China or Pakistan remain completely isolated from work related to the Indian contract.
Suppliers have also been instructed not to procure raw materials for India’s polymer banknote substrate from China or Pakistan. They must additionally undertake not to supply India-specific polymer substrates to any third country.
These measures have been incorporated to safeguard the integrity and security of India’s currency production process.
Experience and supply capacity mandatory
To qualify for the tender, manufacturers must have supplied polymer banknote substrates with embedded security features to central banks or authorised banknote printing organisations for a minimum of three years.
Applicants must also demonstrate the ability to supply at least 20,400 reams, equivalent to 30 per cent of the indicative procurement requirement.
BRBNMPL has indicated an initial requirement of 68,000 reams of polymer substrate, with around 34,000 reams each earmarked for two denominations.
However, the agency has clarified that this quantity is only for immediate requirements and may be increased following successful field trials.
RBI evaluating feasibility
The procurement process follows remarks made by RBI Governor Sanjay Malhotra last month, when he confirmed that the central bank was exploring the feasibility of introducing polymer banknotes in India.
He had stated that discussions were still at a preliminary stage and that the RBI was evaluating both the advantages and practical aspects of adopting polymer currency.
The success of the proposed field trials is expected to play a key role in determining whether polymer notes are introduced on a larger scale.
Cash usage remains strong
The initiative comes even as the RBI’s expenditure on printing currency declined significantly during the previous financial year.
According to the RBI’s annual report, note printing costs fell by nearly 25 per cent to Rs 4,875 crore during 2025-26, reflecting reduced printing requirements.
Despite lower printing expenditure, the total value of currency in circulation increased by 12 per cent year-on-year to Rs 41.23 trillion at the end of March 2026, indicating that cash continues to play a significant role in the Indian economy.
The Rs 500 denomination remained the most widely used, accounting for 86 per cent of the total value of currency in circulation and more than 7 billion notes, representing 41 per cent of the total volume.
The currency-to-GDP ratio also rose to 12.1 per cent, compared with 11.7 per cent a year earlier, suggesting that cash usage remains resilient despite the rapid growth of digital payments. However, the ratio remains below the post-demonetisation peak of 14.4 per cent recorded in March 2021.