What is the difference?

This is a serious question. I am not simply trying to provoke.

Saw a piece on TV on fake money being pushed into India by some really bad guys via Nepal. No debate here about what should be done to them since the fake money is used to buy weapons and recruit bad guys who harm Indians. Catch them and punish them badly. Very badly.

The questions I have are about the currency.

Question: what is the difference between fake Indian rupee and the rupee printed by RBI?

Security advisor M K Narayanan said in the piece, goes something like, “though the issue is serious, there is no threat to the economy”.

I assume he means that the amount of fake money coming into India is small, compared to the amount already in circulation.  Hence the dilution is not much.

Something like the milkman adding water to milk and diluting the value of the milk you get. If he adds a lot, milk is really worthless. If he adds a few drops, not a big problem.

Question: If the milkman is RBI, and RBI is adding a lot of paper money to the system, what happens to the value of the currency that already exists in the system?

Question: why is this not considered a threat to the national security or at least a threat to the economy?

Seriously, what is the difference?