The Embassy’s attention has been drawn to several media reports with regard to India’s draft proposal for cooperation in the power sector between India and Nepal.
The Embassy wishes to clarify the position as follows:
i. The draft is in the nature of a framework agreement that outlines the broad principles and parameters for overall cooperation in the power sector including trading, transmission lines development and grid connectivity and construction of power projects.
ii. Every power project to be developed will require a separate project implementation agreement and power purchase agreement, terms and conditions of which would need to be agreed.
iii. In no way does the draft constrain Nepal’s sovereign right to develop its hydropower potential.
iv. Power trade in India is under the OGL (Open General License) list. An Electric Power Trade Agreement was signed in 1997. Separately, Bilateral Power Exchange Committee meetings are held from time to time to review power exchange arrangements between India and Nepal.
v. The proposal forwarded by India is a draft for discussion and would require bilateral negotiations prior to finalization. Both sides are free to propose amendments or modifications to the draft.
Source : Indian Embassy Website