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Nepal has achieved a historic milestone in cross-border electricity trade, earning a record Rs 29.32 billion from electricity exports to India and Bangladesh during fiscal year 2025/26.

According to statistics released by the Nepal Electricity Authority (NEA), export earnings increased by 67.96 percent compared to Rs 17.45 billion recorded in the previous fiscal year. The sharp rise was driven by higher electricity production from domestic hydropower projects, increased export volumes, and improved access to regional electricity markets.

The surge in exports marks the highest revenue earning from energy trade in the country's history and reflects Nepal's growing role in the South Asian energy market. Currently, Nepal is having surplus electricity production, allowing the country to export a notable amount of electricity to its neighboring countries.

Nepal exported 3.8774 billion units (kWh) of electricity during the review period, up 62.89 percent from 2.3829 billion units in FY 2024/25. The NEA sold electricity through the Indian Energy Exchange (IEX), including the Day-Ahead and Real-Time markets, via NTPC Vidyut Vyapar Nigam (NVVN), and under the trilateral power trade arrangement with Bangladesh. The average export price stood at Rs 7.56 per unit.

At the same time, Nepal's dependence on imported electricity continued to decline. Electricity imports from India fell by 31.57 percent to 1.1498 billion units during FY 2025/26, while import expenditure dropped 18.29 percent to Rs 10.55 billion. The reduction reflects Nepal's increasing ability to meet domestic demand through hydropower generation, particularly during the monsoon season when river flows boost electricity production.

As a result, Nepal recorded a net gain of Rs 18.76 billion from cross-border electricity trade in FY 2025/26, more than four times higher than the Rs 4.53 billion net saving achieved in the previous fiscal year.

India first approved the import of 39 MW of electricity from Nepal in October 2021. Within four years, Nepal expanded its export capacity to more than 1,000 MW during periods of surplus generation.

The country's transition gathered momentum in fiscal year 2023/24, when Nepal became a net exporter of electricity for the first time. Since then, export volumes and revenues have grown steadily with the commissioning of new hydropower projects and the expansion of cross-border transmission infrastructure.

Energy experts attribute the record performance to the rapid growth of hydropower production, stronger transmission connectivity with neighboring countries, efficient energy management by the NEA, and expanding regional electricity cooperation. Nepal's participation in India's power exchanges and the trilateral trade mechanism with Bangladesh has also created new opportunities to market surplus electricity.

The NEA record earnings highlight Nepal's transformation from an energy-importing nation to an emerging regional electricity exporter. Beyond generating foreign exchange, rising electricity exports are expected to strengthen the NEA's financial position, reduce pressure on foreign currency reserves, and encourage further investment in hydropower and transmission infrastructure, according to economists.