The Ministry of Power of the Government of India released the Guidelines on Import/Export (Cross Border Trade) of Electricity – 2018 on 18 December 2018, replacing the Guidelines issued in 2016, following consultation with its stakeholders.

The revised Guidelines aims to

• Facilitate import/ export of electricity between India and its neighboring countries;
• Evolve a dynamic and robust electricity infrastructure for import/ export of electricity;
• Promote transparency, consistency and predictability in regulatory mechanism pertaining to import/ export of electricity in the country; and
• Promote reliable grid operation and transmission of electricity for import/ export.

Energy stakeholders in Bangladesh, Bhutan, and Nepal have welcomed the update. The revised provision on trade agreements, quoted below, could pave the way for the regions’ power producers to conduct electricity trade with India, as well as with third countries, such as Bangladesh, Bhutan, Myanmar, and Nepal:

The import/ export of electricity between India and the neighboring country(ies) may be allowed through mutual agreements between Indian Entity(ies) and Entity(ies) of the neighboring country(ies) under the overall framework of agreements signed between India and the neighboring country(ies) consistent with the provisions of the prevailing laws in the respective country(ies), including-

(i) through bilateral agreement between two countries

(ii) through bidding route; or

(iii) through mutual agreements between entities

Provided that in case of tripartite agreements, the cross border trade of electricity across India shall be allowed under the overall framework of bilateral agreements signed between Government of India and the Government of respective neighboring country(ies) of the participating Entity(ies).

In an interview, Mr. Dinesh Kumar Ghimire, Joint Secretary, Ministry of Energy, Water Resources, and Irrigation of the Government of Nepal, called the update a "major success" for energy stakeholders in the region. He added that this revision allows Nepal to expand its power market. Independent power producers will also be able to sell their power to other countries via the Nepal Electricity Authority. It could also promote more foreign direct investment in Nepal's hydropower sector.

Dr. Ahmad Kaikaus, Power Secretary, Government of Bangladesh noted that the Guidelines will allow the regional market development and integration of neighboring countries. It also enables the Government of Bangladesh to export its surplus electricity to its neighboring countries using Indian transmission lines. He added that Bangladesh can now do bilateral power trade with Nepal and Bhutan.

Mr. Tandi Dorji, Foreign Minister of the Government of Bhutan, shared that the Government of Bhutan welcomes the development, with the opportunity it brings to explore tripartite cooperation in the electricity market.

Read the full Guidelines on Import/Export (Cross Border Trade) of Electricity – 2018.

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