India will save about Rs 1,200 crore in foreign exchange annually by sourcing raw materials from cotton-producing states such as Gujarat and producing the currency paper locally.
India has been importing currency paper for the past 45 years.
The initiative has been fast tracked under the guidance of Prime Minister Narendra Modi through the department of economic affairs. MS Rana, CMD of SPMCIL, confirmed that the currency paper and the raw material for producing it will be procured domestically.
“It is a step towards Make in India. It has taken 45 years for us to do this. But this will protect us from any kind of crisis and give us control over all monetary aspects,” said Rana.
The Security Printing and Minting Corporation of India Limited (SPMCIL) spends around Rs 1,200 crore in foreign exchange annually in procuring this paper. From 2015, it will produce the currency paper locally. The printing is done by Reserve Bank of India (RBI).
India imports 15,000 metric tonnes (MT) of currency paper every year at an average cost of Rs 8 lakh per metric tonne. About 95% of this paper is imported from the NATO countries.
The machines for producing the paper are being procured from Germany and the first phase of production will begin from March 2015 at the Hoshangabad printing press.
SPMCIL is setting up one line of bank note paper machine with a capacity of 6,000 MT per annum at a cost of Rs 495 crore.
It has commissioned a 25 MT per day cotton-combing plant to process cotton for making currency paper.
Another mill is being set up in Mysore through a joint venture between SPMCIL & Bharatiya Reserve Bank Note Mudran Private Ltd (BRBNMPL). The JV will set up two lines of bank note paper machine with capacity of 12,000 MT per annum at a capital cost Rs 1,490 crore.
“Construction of industrial building is in progress and project is likely to be commissioned by June, 2015 in two phases,” said Rana.