India Is Printing Money on Plastic.
Can They Take the Heat?
On 27 July the government told the Lok Sabha it had approved a field trial of polymer banknotes: one billion ₹10 notes and one billion ₹20 notes, to be issued alongside paper. On 5 August the Governor said they could be in circulation from April 2027 if the trials go to plan. India has tried this before. A trial of one billion ₹10 polymer notes in five cities was approved in 2012 and planned for 2014, and the notes were never issued.
The case for polymer is durability. Central banks that have switched report notes lasting two and a half to four times longer than paper. The gain is largest for low denominations, which change hands most often and wear out fastest, and ₹10 and ₹20 notes make up about a quarter of all notes in circulation by number. A polymer note costs about twice as much to produce as a paper one, so the saving depends on how long it lasts in use.
Whether that holds in India’s heat, humidity and handling, and what it asks of the machines that count and sort cash, are the questions the trial has to answer.
What are polymer notes
Polymer notes are printed on biaxially oriented polypropylene, a plastic film also used in packaging. The film is clear. White coatings on both sides let it take ink, and the areas left uncoated become the transparent security windows. The finished substrate is under a tenth of a millimetre thick.
Full polymer substrates include Guardian, developed in Australia and now made by CCL Secure, and De La Rue’s Safeguard. Hybrid substrates combine cotton paper with polymer film, as on Switzerland’s current notes.
The base film is standard plastics technology, and India has large film makers. Banknote grade is harder: uniform clarity, coatings that hold ink, built-in security features and a secure supply chain. Only a handful of firms supply it. India’s tender invites global bids, and a separate process seeks a partner to build a plant in India.
Polymer allows features paper cannot carry, such as clear windows, which are hard to copy. Counterfeiting usually falls sharply after a switch: in Canada it went from 35 per million notes in 2011 to under one per million in 2014. The advantage narrows as forgers adapt, so the notes still need regular security upgrades.
Major economies using polymer notes
Countries where polymer carries a large share of everyday notes, leaving out trials and commemoratives
Where polymer is in regular circulation
The year polymer entered circulation, and the notes now printed on it
| Country | Since | Notes on polymer |
|---|---|---|
| Australia | 1988 | All denominations |
| New Zealand | 1999 | All denominations |
| Romania | 1999 | All denominations |
| Mexico | 2002 | 20 and 50 peso |
| Vietnam | 2003 | All notes from 10,000 dong up |
| Singapore | 2004 | $2, $5 and $10 |
| Malaysia | 2004 | RM1 and RM5 |
| Nigeria | 2007 | ₦5 to ₦50 |
| Chile | 2009 | 1,000 to 5,000 peso |
| Canada | 2011 | All denominations |
| United Kingdom | 2016 | All Bank of England notes |
Frank TakeChallenges polymer must overcome
The choice of ₹10 and ₹20 for the trial is sensible. These notes change hands most often and wear out fastest, so a longer life saves the most there. The harder questions are about how polymer behaves in Indian conditions and what it asks of the system that handles cash.
The first is durability. Polymer does not absorb ink, so the print sits on the surface and wears off before the plastic does. The Bank of Zambia warned of this in 2004, and in 2013 Nigeria’s central bank said its notes were fading early in a hot climate, with traders refusing them. Because a polymer note costs about twice as much to produce, the saving depends on it lasting well over twice as long. Mexico calculated that it needed at least 2.2 times the life of paper to break even.
The second is handling. Polymer notes shrink above about 120°C, tear easily once nicked, and stick together when new. Stapling and folding are among the main causes of damage reported by other central banks. Public acceptance matters too. The UK faced a backlash in 2016 over traces of animal fat in its notes, and India’s tender reportedly asks suppliers to certify there is none.
The third is security and supply. The fall in counterfeiting after a switch does not last. In Australia, polymer counterfeits made up more than half of all counterfeits detected by 2019. India will also buy the substrate through a global tender, so it will depend on a small group of overseas suppliers until it builds its own capacity.
The fourth is the machines. ₹10 and ₹20 notes rarely go through ATMs, but they pass constantly through branch counting machines, currency chest sorters, and ticket and vending machines, all of which are set up for paper. Polymer is lighter, which affects counters that work by weight, and a scanner can read its clear window as the end of the note. RBI’s fitness standards for note sorting machines are written for paper, and briquetting, the method used to dispose of soiled notes, does not work for polymer.
If the trial succeeds and polymer moves to ₹100 and above, the change reaches India’s 2.53 lakh ATMs. Canada’s ATMs short-dispensed new polymer notes in 2012 because they stuck together, and the Bank of England gave machine makers test notes up to ten months before each issue. With April 2027 as the target, the trial is worth watching for how the notes wear and for how early banks and machine makers are brought in.
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