Kathmandu, – India signed an agreement on Thursday to buy 10,000 megawatts of energy over the next 10 years from Nepal, in an agreement seen as a way to restore declining relations between the two neighboring countries in the face of Chinese influence over the Himalayan country.
The agreement was signed in Kathmandu during the official visit of Indian Foreign Minister Subrahmanyam Jaishankar.
“This is a historic development. This will strengthen the economic cooperation between the two neighbors,” Nabin Raj Singh, spokesperson at the Ministry of Energy, Water Resources and Irrigation, told EFE, adding that they hoped it would help reduce the trade deficit with India.
The agreement is significant not only because of its volume but because, despite both countries having a historical relationship, India began buying Nepali electricity only two years ago.
New Delhi has blocked Nepali electricity exports from projects financed by China, whose growing influence in the region is causing unrest in what India considers its natural zone of influence.
Nepal sees India and Bangladesh’s coal dependence as a potential market, thanks to its capacity to generate hydropower while the West urges both Asian countries to reduce their emissions to fight climate change, economist Chandramani Adhikari told EFE.
In June 2022, Nepal decided to hand over the development of a $2.4 billion hydroelectric project to Indian state-owned NHPC Limited in June 2022, almost four years after China withdrew from it.
Although India has seen Nepal as part of its sphere of influence, a trade blockade imposed by New Delhi in 2015 strained relations between the neighbors, giving China an opportunity to increase its influence and investment. EFE