A liberal trading regime is in India’s national interest. As India transitions to a power grid dominated by renewables, regional trade could prove useful in maintaining grid stability.
Relevance : GS Paper II , III (International Relation)
[1000 words reduced to 200]
Govt has set the rules for the flow of electricity across South Asian borders.
Significance of this Policy
- It is a concession to India’s neighbours.
- It is a response to pressure from neighbours to drop trade barriers.
- India has signalled that it is serious about working with neighbours .
The idea of cross -border energy flow
- It was driven by India’s need for affordable power
- It took shape in 2014 with the signing of the SAARC Framework Agreement for Energy Cooperation.
The Erstwhile Roadblock
In 2016, govt issued guidelines that prevented anyone other than Indian generators in the neighbouring country from selling power to India. This caused worry in Nepal, Bhutan and Bangladesh.
Benefits of the New Guidelines
- A liberal trading regime is in India’s national interest.
- Regional trade could prove useful in maintaining grid stability.
- A wider pool of generation sources could help India achieve a greener grid.
- The new guidelines can help creation of a true low-cost regional market.
Way Forward
- Regional institutions for management of electricity trade are required.
- The political vision to create this must be maintained.
