India Signs Agreement on Cross-Border Renewable Energy Trade

India has signed a cross-border renewable energy trade agreement with Nepal and Bhutan, enabling the exchange of electricity generated from renewable sources such as hydropower and solar energy. The agreement marks an important step toward strengthening regional energy cooperation in South Asia while advancing shared climate and sustainability goals.

Under the agreement, India will facilitate import and export of surplus renewable electricity through existing and planned cross-border transmission infrastructure. Nepal and Bhutan, endowed with significant hydropower potential, will be able to access larger markets for clean electricity, while India will benefit from reliable and diversified renewable energy supplies to meet its growing demand. The framework also allows scope for integrating solar and other renewable sources in the future.

The agreement promotes grid connectivity, regulatory coordination, and transparent market mechanisms for cross-border power trade. Harmonisation of technical standards, pricing frameworks, and scheduling protocols is expected to improve efficiency and reliability of electricity exchange. It also supports long-term power purchase agreements, encouraging investment in renewable energy projects across the region.

From a strategic perspective, the initiative strengthens regional energy security by reducing dependence on fossil fuels and enhancing resilience through shared infrastructure. It complements India’s broader efforts to develop a regional electricity market and aligns with initiatives such as the One Sun One World One Grid (OSOWOG) vision.

The agreement also has economic and diplomatic significance, fostering mutual interdependence and trust among the participating countries while supporting sustainable development and employment generation in the renewable energy sector.

Significance

The cross-border renewable energy trade agreement enhances regional energy security, promotes clean energy integration, and deepens economic cooperation between India, Nepal, and Bhutan. It supports climate action, strengthens regional connectivity, and advances India’s leadership in sustainable energy diplomacy.