Mumbai: The currency printing arm of India's central bank has invited global expressions of interest (EoIs) from manufacturers to supply polymer substrate sheets with embedded security features for printing polymer banknotes, officials aware of the matter told ET.

If introduced, it will be a first for the country, where the Reserve Bank of India has relied on specialised paper for printing money for nearly a century.

Bharatiya Reserve Bank Note Mudran (BRBNMPL) has invited eligible domestic and international manufacturers to submit bids by August 18.

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It seeks suppliers capable of manufacturing opacified polymer substrate sheets with suitable security features for banknotes.

However, the EoI does not specify either the intended denominations to be printed using the material or the timelines for introducing polymer notes.

The tender imposes stringent national security conditions. Bidders must obtain security clearance from the government, ring-fence any operations in China or Pakistan from the India contract, avoid sourcing raw materials from the two countries for India specific banknote substrate and undertake not to supply the India specific substrate to any third country.

To qualify, bidders must have supplied polymer banknote substrate with security features to central banks or banknote printing organisations for at least the past three years.

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Field Trials
They must also demonstrate the capacity to supply at least 20,400 reams, or 30% of the indicative requirement. The initial requirement is 68,000 reams-around 34,000 reams each for two denominations-although BRBNMPL said this is only for immediate needs and larger procurement could follow after successful field trials.

Last month, RBI governor Sanjay Malhotra said Mint Road was examining the possibility of introducing polymer banknotes, although discussions were still at a preliminary stage. Polymer banknotes, made from durable plastic films, typically last longer than paper notes and require less frequent replacement because of their greater resistance to wear and tear.

The move comes even as RBI's expenditure on printing currency has declined.

Note printing costs fell nearly a quarter to ₹4,875 crore in 2025-26 from a year earlier, largely due to lower printing requirements, the RBI's annual report showed.

The decline in printing costs came despite the value of currency in circulation rising 12% to ₹41.23 lakh crore at the end of March 2026, from ₹36.86 lakh crore a year earlier, showing continued demand for cash.

The ₹500 denomination remained the dominant note, accounting for 86% of the total value of currency in circulation at ₹35.27 lakh crore, with more than 7 billion notes in circulation, representing 41% of the total volume. The currency-to-GDP ratio increased to 12.1% at the end of March 2026 from 11.7% a year earlier, indicating that cash usage remains robust despite the rapid adoption of digital payments.

However, it remains below the post-demonetisation peak of 14.4% recorded in March 2021, when remonetisation following the 2016 note ban led to a sharp increase in currency in circulation.