India Pursues Regional Power Links to Support Clean Energy Growth
India is using energy diplomacy alongside its domestic clean energy transition, aiming to expand cross-border electricity interconnections and attract international capital. The strategy has moved from policy ambitions toward construction projects, feasibility studies and agreements between utilities and governments. As of September 2025, India had 10,323 MW of installed cross-border transmission capacity, with hydropower-rich neighbours such as Nepal and Bhutan seen as key partners.
India’s regional grid strategy pairs domestic clean-energy growth with cross-border power trade and efforts to draw international finance. Its planners argue that moving electricity between countries can often cost less than shipping fuel for local generation, especially where hydropower exceeds local demand.
By September 2025, India’s cross-border transmission capacity reached 10,323 MW. Bhutan supplied the largest share, 7,560 MW, through seven synchronous lines and hydropower projects. Nepal followed at 1,600 MW, mainly via the Dhalkebar–Muzaffarpur link. Nepal’s planned additions could lift its total above 15,000 MW by 2030-31, making it India’s biggest interconnection partner.
Closer grid links could affect households, businesses and utilities across South Asia by sharing power supplies and balancing renewable output. Nepal and Bhutan may gain export revenue and related infrastructure, while Indian consumers and industry could see reliability or cost benefits. Communities near new lines and hydropower sites may experience construction, land-use or environmental changes. Investors and state utilities may face financing, regulatory and operational risks as projects move forward.