Nepal’s Currency Shift: Why It Ditched India for China
For decades, Nepal relied on India's Security Press in Nashik to print its currency. But in a surprising move, Kathmandu has increasingly turned to China's China Banknote Printing and Minting Corporation (CBPMC) since 2015. What sparked this dramatic change?
It's not just Nepal. Countries like Bangladesh, Sri Lanka, Malaysia, Thailand, and Afghanistan are also outsourcing their currency printing to China. Is this a simple cost-cutting measure, or is there more to the story?
Last week, Nepal's central bank, the Nepal Rastra Bank (NRB), sent a letter of intent to CBPMC for a massive order: 430 million Rs 1,000 banknotes, valued at around $17 million. This isn't an isolated incident. Since 2015, CBPMC has secured seven contracts from Nepal, printing a staggering 2.38 billion banknotes and earning $63 million. But here's where it gets controversial: while cost is a factor, the shift may also be tied to geopolitical tensions and technological advancements.
The Indian Connection: A Long-Standing Partnership
India's Security Press was Nepal's trusted currency printer for decades. From 1945 to 1955, every Nepali banknote was printed in India, solidifying a strong collaboration. However, things took a turn in 2015 when Nepal introduced new currency designs featuring disputed Himalayan territories – Lipulekh, Limpiyadhura, and Kalapani – claimed by both Nepal and India. An Indian printer couldn’t depict these regions, forcing Nepal to seek alternatives.
China's Rise: More Than Just Low Bids
CBPMC, based in Beijing's Xicheng district, boasts the title of the world's largest money printer. Founded in 1948, it employs over 18,000 professionals and operates a dozen high-security facilities. But China's appeal goes beyond scale. They offer cutting-edge printing technology and advanced security features like watermarks, holographic threads, and color-shifting inks, making counterfeiting significantly harder. Their innovative “Colordance” holographic feature is both more secure and cost-effective.
India's Counter-Move: A Late Entry?
Interestingly, India hasn't been entirely shut out. In January 2023, the NRB awarded a contract to India's Security Printing and Minting Corporation Limited for 300 million Rs 50 banknotes. This contract, valued at $5 million, suggests India is trying to reclaim its position. Since then, the Indian firm has secured contracts with Thailand, Malaysia, Bangladesh, Sri Lanka, Brazil, and Poland, seemingly capitalizing on the opportunity.
The Global Currency Printing Landscape
A handful of state-run and private companies dominate the global banknote printing market. China's CBPMC, Japan's National Printing Bureau, Russia's Goznak, and the US Bureau of Engraving and Printing are major state players. Privately, De La Rue (UK), Giesecke & Devrient (Germany), and Oberthur (France) hold significant shares. However, China has been strategically expanding its reach. In 2015, CBPMC acquired De La Rue's banknote printing division, gaining access to advanced technology and expanding its market to Europe, Africa, and West Asia. With the most printing facilities and the largest workforce, China is positioning itself as a dominant player in this field.
Geopolitical Implications: A New Front in the India-China Rivalry?
China's growing influence in currency printing, particularly among countries in its Belt and Road Initiative, raises questions about its broader geopolitical ambitions. While Chinese currency printing only constitutes a small portion of its orders, the expansion of its printing operations provides another avenue for China to extend its influence. Should India be concerned about this shift, and what does it mean for regional power dynamics?
What do you think? Is Nepal's move to China purely economic, or are there deeper geopolitical factors at play? Share your thoughts in the comments below!
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