At a time when Nepal has been wasting about 800 MW of electricity due to lack of consumption in the domestic market, India can generate huge goodwill in Nepal by allowing an additional 212 MW of electricity import from Nepal.

It is just a matter of peanut for India to allow the import of an additional 212 MW of electricity from Nepal but it will gain huge goodwill in Nepal proving redundant the old populist anti-Indian narratives that India will not purchase Nepalese electricity.

In the last one and half years, Nepal and India have made many meaningful negotiations in their bilateral relations taking each other’s concerns and responding to them with care. Among the most valuable deal was the beginning of the export of electricity from Nepal to India.

After a long hiccup, India has agreed to import 364 MW of electricity from Nepal. For this, Nepal also has reciprocated awarding the license to the Indian state's own power company to construct two lucrative reservoir hydropower projects including West Seti in the far west.

As trade is a process of negotiations and give and take, it is natural for Nepal and India to make deals as per the business. Goodwill does not last on electricity trade only. Backing firmly on India’s bid for permanent membership and calling for the UN Security Council reforms to side with India, Nepal gives a clear message.

However, Nepal and India's power trade faced disruptions with India’s adamant response to Nepal’s proposal to export an additional 212 MW of electricity to India.

Knowing that the country would have a huge surplus of energy in September and October, Nepal requests India to export of additional 212 MW to prevent a spill of up to 800 MW daily due to increasing electricity generation within the country and decreasing domestic demand.

As soon as local online reported the story regarding the waste of Nepalese electricity due to lack of market, those, who were defeated in their narrative after Nepal began exporting, found the right moment to push their narrative that India cannot purchase electricity generated in Nepal. Social media like Twitter is full of comments and criticisms against Indian and Nepalese authorities.

Allowing 364 MW of import of electricity from Nepal, India has gained huge goodwill in Nepal. Had India allowed an additional 212 MW import, the narrative that a group of Nepalese have been using to criticize India would have completely vanished.

In June, Nepal started exporting the total approved 364 MW of electricity to India through its power exchange market. Buoyed by surplus rainfall this year, Nepal is exporting surplus electricity to India through its power exchange market, according to the state-owned power utility body, Nepal Electricity Authority (NEA).

"We are facing from 400 to 800 MW as losses due to increasing electricity generation within the country and decreasing domestic demand," said Pradeep Thike, Deputy Managing Director of NEA.

"We have asked the Indian authority for the approval of exporting an additional 212 MW of electricity for the last two months, but have not got any response from them," he said.

By selling 364 MW of electricity to India from June to November end, Nepal will receive over Rs 9 billion, according to the NEA.

NEA started selling surplus electricity in the day-ahead market of Indian Energy Exchange Limited (IX) at competitive rates from June 2.

Nepal became an energy surplus country, especially in wet sessions (six months), ever since the 456MW Upper Tamakoshi Hydropower Project came into full operation in August last year. As many more hydropower projects are in the process of completion, Nepal will have over 1000 MW of surplus electricity next year.

At a time when Nepal’s domestic market does not have the capacity to consume huge surplus electricity and Nepal is unable to make any deal with India, Nepal will have to waste billions of rupees worth of seasonal electricity. This will put a huge financial burden on NEA.

As trade is negotiated, it involves conditions and other safeguarding measures of parties. In recent months, India’s main condition in the electricity trade is the exclusion of Chinese investment and its involvement. Due to this condition, Nepal is unable to sell 456 MW of electricity generated by Upper Tamakoshi, which is constructed through domestic investment. However, out of 4 contractors, one Chinese contractor has been involved in the civil work and three Indian contractors were involved in the transmission, hydro-mechanical.and Electro-mechanical.

Whether one likes it or Nepal, India is only a big market for surplus Nepalese electricity. For this, Nepal needs to gain goodwill from India. As electricity export is a trade, Nepal also needs to learn the art of trade and deal with India accordingly that art.