The mill would produce 6,000 tonnes of paper on which currency notes of denominations -- Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000 -- will be printed.
The government will set up two more units of paper mills of 12,000 tonnes capacity at Security Paper Mill in Hoshangabad (Madhya Pradesh) to produce large denomination currency notes domestically.
On Saturday, Finance Minister Arun Jaitley had inaugurated the new bank note paper line of 6,000 tonnes capacity and also flagged off the first consignment of Rs 1,000 bank note paper made indigenously to Currency Note Press at Nashik.
"... Two more paper lines of total capacity of 12,000 tonnes would be set up at Security Paper Mill, Hoshangabad," said a Finance Ministry release quoting Jaitley as saying.
The New Security Paper Mill in Hoshangabad will give India indigenously produced currency note paper and will prove to be a major step toward Prime Minister Narendra Modi's 'Make in India' initiative, it added.
The mill would produce 6,000 tonnes of paper on which currency notes of denominations -- Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000 -- will be printed.
Earlier, the paper to print high denomination currency was imported.
Jaitley said that the new facility will would ensure huge savings on foreign exchange.
A New Security Paper Mill through a joint venture has been established at Mysore in Karnataka.
Jaitely also expressed happiness that beginning of the government's flagship programme 'Make In India' is being made in Madhya Pradesh, a state which has ceased to be Bimaru (sick), following various initiatives taken by Chief Minister Shivraj Singh Chouhan in the recent past.
Earlier, the Hoshangabad facility produced paper for printing of currency notes of smaller denominations only.
"With the development of the new facilities at Hoshangabad and also at Mysore, it will be possible to produce currency printing paper in adequate quantity to meet the needs of the nation," the release said.
The ink used in printing of the bank notes is mostly produced within India.
The new Bank Note Paper Line's foundation stone was laid by then Finance Minister Pranab Mukherjee in December 2011.
The project has been completed at a cost of Rs 495 crore.
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