Pokhara, Nepal | July 17, 2026
India Nepal Power Trade
India Nepal Power Trade is set for a significant expansion after the two neighboring countries agreed to substantially increase cross-border electricity exchange through new high-capacity transmission infrastructure.
The decision was finalized during the 13th Nepal–India Joint Steering Committee (JSC) meeting held in Pokhara, where senior energy officials from both governments approved multiple projects aimed at strengthening regional energy connectivity and supporting long-term electricity trade.
The expanded cooperation reflects the growing strategic partnership between India and Nepal in the power sector as both countries seek to improve energy security, grid reliability, and clean electricity integration.
Electricity Trading Capacity Increased
Under the new agreement, Nepal will now be able to:
- Export up to 1,650 megawatts (MW) of electricity to India.
- Import up to 1,400 MW of electricity from India.
Previously, Nepal was permitted to:
- Export 1,100 MW to India.
- Import 1,000 MW from India.
The increase has been made possible by expanding cross-border transmission infrastructure between the two countries.
Two Major Transmission Lines to Power the Expansion
The enhanced electricity trade will utilize two high-voltage transmission corridors:
- Dhalkebar–Muzaffarpur 400 kV Transmission Line
- Dhalkebar–Sitamarhi 400 kV Transmission Line
According to Nepal’s Ministry of Energy, Water Resources and Irrigation:
- The Dhalkebar–Muzaffarpur line has been operational since 2016.
- The Dhalkebar–Sitamarhi transmission line is nearing completion and will significantly increase power transfer capacity once commissioned.
SJVN Developing Arun III Hydropower Project
India’s state-owned SJVN Limited is playing an important role in Nepal’s energy development.
Its subsidiary, SJVN Arun III Power Development Company, is developing the 900 MW Arun III Hydropower Project in eastern Nepal while also constructing the Dhalkebar–Sitamarhi transmission line.
The hydropower project is expected to contribute substantially to Nepal’s export-oriented electricity generation in the coming years.
Several New Cross-Border Projects Approved
Beyond increasing electricity exchange limits, the Joint Steering Committee approved multiple transmission infrastructure projects designed to strengthen long-term bilateral power cooperation.
Chameliya–Jauljibi Transmission Line
The committee approved the Detailed Project Report (DPR) for the 220 kV double-circuit Chameliya (Nepal)–Jauljibi (India) transmission line.
Construction is expected to be completed by December 2028.
Joint Venture Between NEA and Power Grid
The meeting also agreed to accelerate the formation of a joint venture company between:
- Nepal Electricity Authority (NEA)
- Power Grid Corporation of India Limited (PGCIL)
The company will develop two major 400 kV cross-border transmission corridors:
- Inaruwa – New Purnea
- Dododhara (New Lamki) – Bareilly
Shareholders’ Agreements and Joint Venture agreements have already been signed between the two utilities.
Motihari–Nijgadh Transmission Line
Officials also approved the DPR for the Motihari–Nijgadh 400 kV double-circuit transmission line.
The project is expected to become operational during 2034–35 and significantly increase Nepal’s electricity export capacity.
Muzaffarpur–Dhalkebar Capacity Upgrade
Both countries also approved an upgrade of the existing Muzaffarpur–Dhalkebar transmission corridor.
The project will replace existing conductors with High Temperature Low Sag (HTLS) conductors, enabling substantially higher electricity transfer without constructing a completely new transmission line.
Lucknow–Kohalpur Project Under Technical Review
The proposed Lucknow–Kohalpur (Lamahi) 400 kV transmission line remains under evaluation.
Officials agreed that additional technical studies will be completed before the project is finalized.
New Butwal–Gorakhpur Project Progress
The meeting reviewed progress on the New Butwal–Gorakhpur 400 kV cross-border transmission line.
Key milestones include:
- Nepal section expected to be completed by August 2026.
- New Butwal 400 kV substation scheduled for completion by December 2027.
Until the substation becomes operational, the transmission line will temporarily operate at 220 kV capacity.
During this interim period, it will facilitate:
- Imports of up to 130 MW from India.
- Exports of up to 200 MW from Nepal.
The Nepal section of the project is being financed by the Millennium Challenge Corporation (MCC).
Strategic Importance of the Agreement
The expanded India Nepal Power Trade agreement is expected to strengthen regional energy integration across South Asia.
For Nepal, increased transmission capacity creates additional opportunities to export surplus hydropower and generate foreign exchange earnings.
For India, the agreement supports access to renewable hydroelectric power while improving cross-border grid stability and regional energy cooperation.
The projects also align with broader efforts by both governments to develop clean energy infrastructure and modernize electricity transmission networks.
Final Take
The latest agreement marks another milestone in the rapidly growing India Nepal Power Trade partnership. By expanding electricity exchange limits and accelerating multiple high-capacity transmission projects, both countries are laying the foundation for deeper regional energy cooperation.
As Nepal continues to develop its vast hydropower resources and India expands its regional energy connectivity strategy, these projects are expected to play a critical role in strengthening power security, supporting economic growth, and promoting sustainable energy across the region.
