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Power Transaction from Nepal to Bangladesh through India
Context:
Union Minister for Power and Housing & Urban Affairs along with Adviser to Bangladesh’s Ministry of Power, Energy, and Mineral Resources, and Nepal’s Minister of Energy, Water Resources, and Irrigation, jointly inaugurated the power flow from Nepal to Bangladesh via the Indian grid.
More on News:
- The historic event, hosted virtually by Nepal’s Ministry of Energy, Water Resources, and Irrigation, marks the first-ever trilateral power transaction facilitated through the Indian grid.
- The Government of India had announced its decision to enable this landmark power transaction, allowing Nepal to export up to 40 MW of electricity to Bangladesh.
- This initiative was revealed during the visit of Nepal’s former Prime Minister, Pushpa Kamal Dahal ‘Prachanda,’ to India from May 31 to June 3, 2023.
- A tripartite power sales agreement was subsequently signed on October 3, 2024, in Kathmandu between NTPC Vidyut Vyapar Nigam, Nepal Electricity Authority, and Bangladesh Power Development Board, paving the way for this collaboration.
Overview of Trilateral Relations:
India-Nepal Relations:
- Historical and Cultural Ties: India and Nepal share deep-rooted cultural connections, including common religious beliefs and familial ties, often referred to as “Roti-Beti ka Rishta” (relationship through food and marriage).
- The open border between the two countries facilitates free movement of people and goods, fostering strong interpersonal relationships.
- Economic Cooperation: India is Nepal’s largest trading partner and a significant source of foreign investment.
- The bilateral trade volume reached approximately USD 8.27 billion in recent years, with India accounting for a substantial portion of Nepal’s imports.
- India also provides vital transit routes for Nepal’s trade with other countries.
- Power Sector Collaboration: A Joint Vision Statement on Power Sector Cooperation was established in 2022, leading to agreements for electricity exports from Nepal to India.
- In 2023, electricity exports reached around 650 MW, significantly contributing to Nepal’s economy.
- High-Level Exchanges: Since 2014, there have been numerous high-level exchanges between the two nations, including multiple visits by Indian Prime Minister Narendra Modi to Nepal and vice versa.
India-Bangladesh Relations:
- Historical Context: The relationship between India and Bangladesh was significantly shaped during the Bangladesh Liberation War in 1971, when India played a crucial role in supporting Bangladesh’s independence from Pakistan.
- Trade and Investment: India is Bangladesh’s largest trading partner, with bilateral trade reaching approximately USD 18 billion in recent years.
- India also provides significant development assistance to Bangladesh, including Lines of Credit worth over USD 7 billion since 2010 for various infrastructure projects.
- Energy Cooperation: Notable projects include the India-Bangladesh Friendship Pipeline and the joint development of the Maitree Super Thermal Power Plant in Bangladesh.
- Recent Developments: The political landscape has shifted recently with the ousting of Prime Minister Sheikh Hasina after extensive protests.
- This has led to increased anti-Indian sentiment within Bangladesh, with accusations that India has interfered in Bangladeshi politics by supporting Hasina’s government during her tenure.
- Water Sharing Issues: India and Bangladesh share 54 rivers, but only two treaties govern their usage—the Ganga Waters Treaty and the Kushiyara River Treaty.
- Security Cooperation: They work together to combat issues such as drug trafficking, human trafficking, and border management along their extensive 4,096 km border.
- Cultural Connections: Events like Friendship Day, celebrated on December 6 each year, commemorate India’s recognition of Bangladesh’s independence and highlight the enduring friendship between the two nations.
Bangladesh-Nepal Relations:
- Historical Context: Bangladesh and Nepal established diplomatic relations shortly after Bangladesh’s independence in 1971. Nepal was one of the first countries to recognise Bangladesh, which laid the groundwork for their bilateral relationship.
- Trade and Economic Ties: Despite a positive trajectory in relations, trade between Bangladesh and Nepal remains limited, totaling less than USD 60 million annually.
- Regional Cooperation Initiatives: Both nations are members of regional organisations such as SAARC and BIMSTEC, which aim to promote economic cooperation and connectivity in South Asia.
- The Phulbari treaty between India and Bangladesh has enabled transit routes for Nepali goods through Indian territory.
