Nepal is on the brink of a crippling electricity shortage as India has announced it will limit its power supply to 654 megawatts (MW) exclusively during solar hours—6 AM to 6 PM—starting Sunday. This drastic reduction, cutting Nepal’s access to Indian electricity to just 12 hours a day, has left the Nepal Electricity Authority (NEA) with little choice but to impose extended load-shedding, particularly in industrial zones, with ripple effects likely to hit households soon.

For months, the NEA has relied on imports from India to offset declining domestic production, which has been hit hard by the ongoing dry season. “So far, we’ve managed with limited load-shedding in industrial areas outside peak hours because of Indian imports,” an NEA official told Bizmandu. “But with supply now restricted to solar hours, we’re looking at 12-hour power cuts in industrial zones overnight.” This shift threatens to disrupt Nepal’s industrial sector, a critical driver of the economy, as factories and businesses brace for prolonged outages.

India’s decision compounds an already strained situation. The NEA has been enforcing four-hour load-shedding in industrial areas during peak evening hours (6 PM to 10 PM) due to India’s refusal to supply power during that window. Now, with the daytime-only restriction, the authority’s ability to manage demand is stretched to its breaking point. “Domestic production is shrinking, and we’ve been patching the gap with imports. This change leaves us with no buffer,” the official added.

The crisis isn’t limited to industry. A recent agreement with India has come under fire from Nepal’s own government, raising doubts about additional imports and threatening residential power stability. Last month, NEA Managing Director Kulman Ghising, with verbal approval from Energy Minister Deepak Khadka, signed a deal at the Nepal-India Bilateral Power Exchange Committee meeting to increase electricity tariffs by 1.5% for both purchases from India and sales from Nepal. The agreement, however, has sparked controversy.

Rather than being ratified by the NEA’s board and submitted to the Electricity Regulatory Commission for approval, the government has demanded Ghising explain his actions. This internal dispute has jeopardized the import of 100 MW of peak-hour electricity from Bihar and Uttarakhand via a 132 kV transmission line, originally planned for 4 PM to 9 PM.

Further complicating matters, a separate deal with India’s NTPC Vidyut Vyapar Nigam Limited (NVVN) to buy 230 MW of power during the winter remains unapproved by India’s Central Electricity Authority. Without this additional supply, Nepal’s energy deficit will widen, pushing the country closer to widespread blackouts.

The NEA warns that if these imports fall through, load-shedding could extend beyond industrial zones into homes, a scenario not seen in years. With domestic hydropower generation faltering and India tightening its grip on exports, Nepal’s energy future hangs in the balance. Businesses are scrambling to adapt, while citizens fear a return to the dark days of routine power cuts. As diplomatic and bureaucratic hurdles mount, the government faces mounting pressure to resolve the crisis before it spirals out of control.