Power shortage is pulling Indo-Nepal trade scenario against Nepal



    Nepal-IndiaCrippled with power shortage, Himalayan country Nepal imposes extra hour of mandatory power cut. The situation is going to further darken its existing big trouble pertaining to trade balance with India, Nepal’s largest trade partner.

    Despite assurances on not increasing the loadshedding hours, Nepal Electricity Authority, the state owned agency in power distribution, has increased the weekly power cut by four hours pulling it to 84hr from 80 hr. A consumer will have to face 12 hr power cut a day now. “It may even go further up depending upon the situation,” said NEA officials.

    Increase in demand versus reduction of water level in the rivers with the onset of winter has been shown as reason behind this situation of the country that is too depended on hydropower.

    Traditionally, industrially backward Nepal remained highly dependent on import, especially from its next door neighbor India, After signing up of bilateral trade treaty in 1996, the situation took a healthy turn for Nepal for few years. But, according to Trade and Export Promotion Centre of Nepal statistics, Nepal’s present official import from India stands at around INR 65,500crore against export of 1,500 crore. This huge and unhealthy trade balance is further getting worse with this shortage of power.

    “Over 50% industrial operations are now almost dead. Increased load shedding will further deteriorate industrial situation,” said Mr. B Sreshtha, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) associate. “As a new trend, entrepreneurs have started shifting in border adjoining Indian towns like Siliguri after liquidating assets,” said traders in Dhulabari, a major Indo-Nepal trade center.

    Despite having 42,000MW economically viable hydropower potential, Nepal’s present production is even bellow 1500MW, much lesser than its need. The country plans to generate 25,000 MW fresh hydropower by 2030 to have 18,000MW exportable surplus in hand.

    But, “It is tough for financially crunched Nepal to develop all these alone. So, we are open for collaborations from other countries like India,” said Nepal Power Ministry officials. In order to facilitate that, conflicting acts of power sector, causing trouble in initiating powerprojects, are in process of being amended.

    Source : The Economic Times (India)