India’s ministerial cabinet has approved the agreement to purchase 10,000 megawatts of electricity from Nepal in the next 10 years. An agreement to this regard was signed on June 1, 2023 during Prime Minister Pushpa Kamal Dahal’s official visit to India. The agreement awaited endorsement by the Indian Cabinet.

“India’s cabinet approval to purchase 10,000 MWs of electricity from Nepal in the next ten years has paved the way to develop a new road map for electricity development in. This could play a significant role in the economic development and restructuring of Nepal” said Dr Shankar P Sharma, Nepalese Ambassador to India via the social media platform X (formerly Twitter). 

The agreement has been heralded as a breakthrough for the Nepalese energy sector by government officials, as uncertainty loomed around what Nepal would do with its surplus energy upon completion of several large scale hydropower investment projects. While further details on the agreement are awaited, the agreement has been said to be a long term energy deal which will be extended to twenty five years.  As per the agreement, India will also purchase the power generated from the Upper Tamakoshi Hydropower Project.