Nepal's private sector hydropower developers on Tuesday, 21 July expressed strong support for expanding Nepal-India cross-border electricity trade, noting that a majority of the power currently exported to India originates from private sector projects. The remarks came during a meeting between the newly elected executive committee of the Independent Power Producers' Association of Nepal (IPPAN) and Indian Ambassador to Nepal Naveen Srivastava, as reported by the Indian Embassy in Nepal.

Key Developments from the IPPAN-Ambassador Meeting

Ambassador Srivastava highlighted the significant potential for deeper bilateral cooperation in the hydropower sector. He specifically referenced the Nepal-India Agreement on Long-Term Power Trade signed in 2024, under which India has envisaged importing up to 10,000 MW of electricity from Nepal by 2034. The Indian Embassy shared details of the meeting through a post on social media on Tuesday.

The meeting reflects growing momentum in Nepal's push to position its hydropower surplus as a regional energy asset, with private developers increasingly central to that ambition.

Transmission Infrastructure and Trade Volumes

The two countries are actively developing cross-border transmission infrastructure to support large-scale electricity trade. During the 13th meeting of the Nepal-India Joint Steering Committee (JSC) — an energy secretary-level bilateral mechanism held in Nepal last week — both sides agreed to increase electricity trade volumes through two key transmission corridor projects.

Under the revised agreement, Nepal can export up to 1,650 MW of electricity to India and import up to 1,400 MW through two 400 kV cross-border transmission lines: the Dhalkebar-Muzaffarpur and Dhalkebar-Sitamarhi lines. The Dhalkebar-Muzaffarpur line has been operational since 2016, while the Dhalkebar-Sitamarhi line is nearing completion, according to Nepal's Ministry of Energy, Water Resources and Irrigation.

Previously, the two countries had agreed to allow Nepal to export up to 1,100 MW and import up to 1,000 MW through the Dhalkebar-Muzaffarpur corridor alone — making the new targets a meaningful step up in bilateral energy ambition.

Private Sector Licensing Hurdles

Despite the sector's growth, Nepal has yet to grant licences to any private companies to engage in power trading, citing legal uncertainty. Notably, more than half a dozen companies have already been incorporated with the explicit objective of trading electricity domestically and across borders, underscoring the private sector's readiness to move faster than the regulatory framework currently allows.

Regional Energy Connectivity: Bangladesh Link

Beyond bilateral trade with India, Nepal has also begun exporting electricity to Bangladesh through Indian transmission infrastructure — a development that marks a significant step toward broader regional energy integration in South Asia. Both countries have also agreed to expedite work on several new high-capacity cross-border transmission projects to further scale up trade volumes in the years ahead.

With the 10,000 MW import target set for 2034 and new transmission corridors coming online, the Nepal-India power partnership is entering a structurally more ambitious phase.