The Reserve Bank of India (RBI) is preparing to introduce polymer banknotes in India for the first time, with the government approving an initial batch of 2 billion notes for field trials.
The move marks a significant step in the country's currency modernization efforts, although the government has clarified that paper currency will not be phased out. Instead, polymer and paper notes will coexist if the trials prove successful.
Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha that the RBI will print one billion ₹10 notes and one billion ₹20 notes using polymer material.
These denominations were chosen because they are among the most frequently used and often face shortages due to rapid wear and tear.
RBI Revives Long-Pending Polymer Currency Plan
The introduction of polymer currency has been under consideration for nearly two decades. To move the project forward, the RBI has floated a tender seeking suppliers for polymer banknote substrate, the specialized plastic material used to manufacture polymer currency.
Initially, the notes will undergo field trials before any wider public rollout. Officials said the process remains in its preliminary stages, and a nationwide introduction could still take several months.
The initiative is being implemented alongside an expansion of India's currency printing capacity, which has faced production constraints in recent years.
Security Standards a Key Focus
The RBI and the government have incorporated stringent national security requirements into the procurement process.
Prospective suppliers must:
Obtain security clearance from the Government of India.
Ensure that raw materials used for India's polymer substrate do not originate from China or Pakistan.
Keep operations related to India separate from any business conducted in those countries.
Guarantee that polymer substrate manufactured specifically for India is not supplied to any third country.
Eligible bidders must also demonstrate at least three years of experience supplying polymer banknote substrates with embedded security features to central banks or official banknote printers.
The tender requires suppliers to deliver a minimum of 20,400 reams, representing 30% of the estimated first-phase requirement.
Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL) has indicated an initial demand of 68,000 reams, equally divided between the ₹10 and ₹20 denominations, with larger orders expected if the trials are successful.
Longer Lifespan Could Reduce Printing Costs
According to the RBI, international studies show that polymer banknotes last significantly longer than conventional paper notes because they are more resistant to dirt, moisture, folding and everyday wear.
The initiative comes as the RBI's spending on currency printing has declined. The central bank's annual report shows that printing expenditure fell by nearly 25% to ₹4,875 crore in 2025-26, largely because fewer banknotes were printed.
Despite the lower printing costs, the total value of currency in circulation increased 12%, reaching ₹41.23 lakh crore at the end of March 2026, compared with ₹36.86 lakh crore a year earlier.
The RBI has also continued promoting the use of ₹10 and ₹20 coins. Together, these denominations accounted for nearly one-fourth of all banknotes in circulation by volume, although they represented only 1.4% of the total value of currency in circulation.
The government reiterated that there is no proposal to replace paper currency completely, and both types of banknotes will circulate together if polymer notes are introduced commercially after successful trials.
