The devastating tragedy in Nepal, and, subsequently, the Himalayan nation’s leaders demanding climate reparations from China, the US, and India based on absolute emissions underscore the impact the climate crisis is likely to have on relations between countries. At the same time, it reiterates the centrality of clean energy in furthering shared sustainability.

Geography, history, an open border, and social ties make India and Nepal structurally interdependent. The critical question, however, is how to transform that interdependence into greater economic value and resilience, and ultimately into a wider regional energy architecture.

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Soon after his appointment as Nepal’s new energy, water resources and irrigation minister, Biraj Shrestha framed the energy challenges in terms of access, the transition to clean energy, and creating an investment-friendly environment. Nepal’s hydropower sector now has the scale to address these challenges, immediately bringing India into the picture as a long-term clean energy partner. The relationship is consequently moving beyond hydropower generation in Nepal to encompass transmission, distribution, demand and markets as interconnected elements of an emerging energy system.

The momentum is already evident. Nepal exported 3,880 GWh of electricity to India in FY 2025-26, a 63.03% increase over the previous year. During the same period Nepal imported roughly 1,150 GWh from India, resulting in net exports of about 2,730 GWh and earnings of NPR29.32 billion. This is beginning to look less like one-way electricity trade and more like an emerging electricity partnership. Nepal’s hydropower provides relatively flexible and dispatchable electricity,........

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