Indo-Nepal relationship: Nepal is Exporting Electricity to India

Nepal is famous for its stunning scenery, rich cultural history, and welcoming people. However, in recent years, this landlocked nation has embarked on an impressive journey towards becoming a regional power hub.  

In this blog post, we will delve into the factors contributing to Nepal’s electricity export success which helps in strengthen the Indo-Nepal relationship.

Indo-Nepal relationship: Hydropower Potential Unleashed

Nepal boasts tremendous hydropower potential, with its vast river network and abundant water resources. The government has prioritised harnessing this potential, leading to the establishment of numerous hydropower projects across the country. 

Investments in this sector have attracted both domestic and foreign countries. That enables Nepal to tap into its natural resource wealth and generate surplus electricity.

Indo-Nepal relationship: Investment in Infrastructure

To facilitate the generation and transmission of electricity, Nepal has invested significantly in its infrastructure. The construction of transmission lines and substations has improved connectivity, allowing the seamless transfer of power to the Indian market. This development has strengthened Nepal’s position as an attractive destination for investors. That has contributed to the steady growth of the power sector.

Indo-Nepal relationship: Cross-Border Transmission Lines

The establishment of cross-border transmission lines between Nepal and India will help in facilitating electricity trade. 

Indo-Nepal relationship: Nepal is Exporting Electricity Worth Nearly Rs. 2 Billion to India

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These transmission lines, such as the Dhalkebar-Muzaffarpur and Butwal-Gorakhpur lines, have enhanced cross-border connectivity and allowed for the export of surplus electricity. 

The strengthened grid connectivity has further bolstered bilateral cooperation between Nepal and India in the energy sector.

Power Trading Agreements

Power trading agreements between Nepal and India have played a crucial role in facilitating the export of electricity. 

The Power Trade Agreement (PTA) and the Power Exchange Agreement (PEA) have established a framework for cross-border electricity trading. It enables Nepal to sell its surplus power to India. These agreements have provided a reliable and transparent mechanism for bilateral energy trade.

Renewable Energy Initiatives

Nepal’s commitment to renewable energy has also contributed to its success in electricity exports. With a focus on clean energy sources, such as hydropower and solar power. Nepal has positioned itself as an environmentally responsible energy supplier. 

This aligns with India’s growing demand for green energy, providing an additional impetus for the export of electricity from Nepal.

Economic Benefits and Regional Cooperation

The electricity export milestone of nearly Rs. 2 billion holds significant economic benefits for Nepal. 

The revenue generated from electricity exports contributes to the country’s GDP and foreign exchange reserves. Moreover, this achievement strengthens regional cooperation and fosters a mutually beneficial relationship between Nepal and India. 

The increased energy trade between the two countries paves the way for further collaboration in various sectors, including infrastructure development and economic integration.


Nepal’s remarkable achievement in exporting electricity worth nearly Rs. 2 billion to India exemplifies the nation’s commitment to harnessing its hydropower potential and contributing to regional energy security. With investments in infrastructure, cross-border transmission lines, power trading agreements, and a focus on renewable energy, Nepal has successfully established itself as a reliable electricity supplier. 

This accomplishment not only bolsters Nepal’s economy but also strengthens the bilateral ties between Nepal and India. As Nepal continues to leverage its renewable energy resources, the country’s electricity exports are poised for further growth, bringing prosperity and sustainable development to both nations.

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