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In 1997, India outsourced currency printing to foreign firms due to inadequate capacity. This costly move faced criticism and was halted. New presses in Mysore and Salboni were later set up
The government opted to print 360 crore currency units abroad, incurring an expenditure of 9.5 crore dollars. (Representative/Shutterstock)
In the late 1990s, the Indian government made a clandestine decision to outsource the printing of currency notes. This decision, taken by the then Prime Minister on May 8, 1997, was shrouded in secrecy, leaving the nation oblivious for a significant period.
For the first time, the Indian government decided to have its currency printed abroad. Subsequently, the Indian Rupee continued to be printed overseas for several years.
In 1997, the Indian government recognised that the country’s population and economic activities were both expanding. This dual growth necessitated an increased currency flow within the Indian economy. However, the existing currency printing presses in India proved inadequate to meet this burgeoning demand.
In 1996, the United Front government came to power in India, with HD Deve Gowda as Prime Minister. It was during Deve Gowda’s tenure that the decision to print Indian currency abroad was taken for the first and, to date, only time since Independence.
Following consultations with the Reserve Bank of India, the Indian government opted to have banknotes printed by American, Canadian, and European firms. For an extended period, a significant proportion of Indian currency was printed overseas, proving to be a costly endeavour that incurred expenditures of several thousand crore rupees for India.
It is alleged that the government opted to print 360 crore currency units abroad, incurring an expenditure of 9.5 crore dollars. This decision faced significant criticism, raising concerns about potential risks to the security of the nation’s currency. Consequently, the practice of printing notes abroad was promptly halted.
To increase note-printing capacity, the Indian government commissioned two new currency presses. The first, located in Mysore, commenced operations in 1999. The second, situated in Salboni, West Bengal, followed in 2000.
To meet the growing demand for currency paper, a security paper mill was established in Hoshangabad in 1968. With a production capacity of 2,800 metric tons, this facility aimed to enhance domestic currency production. However, the mill’s output proved insufficient to meet the country’s total currency paper requirements. Consequently, additional supplies had to be sourced from countries like Britain, Japan, and Germany.
After establishing a new production line in Hoshangabad to address the growing demand, a second printing press commenced operations in Mysore. These facilities now fulfil the entire demand for Indian currency paper. The paper used for the 500 rupee notes is manufactured domestically. Similarly, the specialised paper for the discontinued 2,000 rupee note was also produced in India. Until recently, a significant portion of the paper used in Indian banknotes was imported from Germany and Britain.
However, the RBI did not disclose where this special paper is produced. The special watermarked paper most commonly used in notes came from Germany’s Giesecke+Devrient and Britain’s De La Rue Company, which is now being produced in India.
Ninety years ago, India’s first currency printing press was established in Nashik by the British. Following independence, the press became the sole source of Indian rupee production. While initially reliant on imported materials like currency paper and ink, the government now asserts that all essential components are domestically sourced.
When the British colonial government first issued rupee notes in India in 1862, it obtained them from UK-based Thomas De La Rue, which had started out printing playing cards and postage stamps before entering the currency business. The 200-year-old company, now known as De La Rue, is the world’s largest commercial banknote printer. The company also manufactures the paper used to print notes.
In the 1920s, the British decided to print money in India. In 1926, they began building the region’s first currency printing press in Nashik, Maharashtra. According to Rezwan Razak, co-author of “The Revised Standard Reference Guide to Indian Paper Money”, the city was chosen for its stable climate and proximity to a major railway line that connected it to the rest of India.
Two years later, the Nashik press began printing Rs 5 notes with the same design initially brought from England. In subsequent years, the press introduced notes with new designs in denominations of Rs 100, Rs 1,000, and even Rs 10,000.
While the Reserve Bank of India prints currency, the Government of India directly handles the minting of coins. Coins are minted at four mints, namely Alipore in South Kolkata, Saifabad in Hyderabad, Cherlapally in Hyderabad, and Noida in Uttar Pradesh. However, the Reserve Bank itself issues them.
