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India’s World – India-Nepal Historic Power Deal



  • India and Nepal have finally signed a Power Trading Agreement.
  • This historic development will allow electricity producers, buyers and traders of the two countries to buy and sell electricity through a connected grid.
  • The Power Trading Agreement will allow Nepal to import as much electricity as it needs when there is a domestic shortfall and export power when there is a surplus.
  • Apart from this, Nepal has also begun signing project development agreements with foreign investors who want to build export oriented hydroelectric power plants in Nepal.
  • Nepal continues to suffer from power shortages. Only 50% of its population has access to electricity. And only 5% of the rural areas are connected to the National Grid.
  • Nepal has got more than 40000MW of commercially viable power available.
  • The significance of this deal is that it is a Win-win situation for both the countries if implemented properly.
  • Power is competitive commodity today.
  • Nepal has been importing power from India.
  • The significance of agreement is that it is a Power Trade Agreement signed between two governments and it provides not just for Imports but also for exports through a power exchange.
  • The price is not mentioned in the agreement and it has to be negotiated.
  • Nepal has issued 28 survey licences to Indian companies to go and survey for setting up of hydroelectric power plants amounting to more than 8000MW.
  • India is putting together a look east energy policy. With Nepal we have Power Trading Agreement, with Bhutan we already have grid connectivity and we are already supplying electricity to Bangladesh.