New Paper Mill for India

India is to take a further step and future-proof its plans for self-sufficiency in currency production with the construction of a new banknote paper mill, at a cost of INR 25 billion ($310 million).

The new mill will belong to Banknote Bank Note Paper Mill India Pvt Ltd, the joint venture between the Indian Finance Ministry-owned Security Printing and Minting Corporation of India (SPMCIL) and Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) , which is owned by the Reserve Bank of India. Located in Mysore, It was opened in 2017 with two lines and has a nominal annual capacity of 12,000 tonnes per year.

In addition, SPMCIL owns Security Paper mill (or SPM, and formerly known as Hoshangabad) in Narmadapuram, which has four lines, two of which produce currency paper. One produces paper for the smaller denomination (10, 20 and 50) notes. The other, inaugurated in 2015, is used principally for high denomination notes and has an annual capacity of 6,000 tonnes per year.

The new paper mill will be located in Balasore, one of the coastal districts of the eastern state of Odisha (formerly known as Orissa), which lies on the Bay of Bengal and is the 8th largest state by area, and the 11th by population. Balasore is in the northernmost part of the state. Some 100 acres have been earmarked for the new site, which will supply all four currency printing operations in India – the two printworks owned by SPMCIL and the two by BRBNPML respectively.

Despite the investment over the last decade in banknote production, and the efforts of the government to encourage digital payments, the current capacity is barely enough to meet current demand. Cash in circulation grew by 7.2% in 2020/21 and by 5% in 2021/22. Annual production of banknotes over the last two years has been just over 22 billion notes. The current nominal paper production capacity is for 18 billion notes, albeit that both mills – in Mysore and Narmadapuram – have exceeded this in recent years.

Paper production at SPM and BNPIMPL in metric tonnes – 2016-2021 (source: Annual Report of SPMCIL and Ministry of Finance ).