Cross-border energy trade is a key part of PM Modi’s South Asia-focused neighbourhood-first policy

The government has set up a high-level group headed by former Union power secretary Ram Vinay Shahi and tasked it with helping build a South Asia-focused energy security architecture, said two people aware of the development.

Cross-border energy trade is a key part of Prime Minister Narendra Modi’s neighbourhood-first policy, with plans to build energy links to check China’s growing influence. India’s energy diplomacy ranges from cross-border electricity trade to supplying petroleum products and setting up liquefied natural gas terminals.

The high-level group, named the South Asia Group for Energy (SAGE), has been set up under the Ministry of External Affairs (MEA)-run think tank Research and Information System for Developing Countries (RIS). India is also moving ahead with its ambitious global electricity grid plan to take on China’s Belt and Road Initiative.

According to a government document reviewed by Mint, “The objective is to achieve a balanced and optimal development of energy infrastructure through mutual understanding and cooperation. SAGE will have the role of promoting, initiating and facilitating effective policy dialogue and capacity building on bilateral, sub-regional and regional basis for energy and related issues, among South Asian countries."

The other members of SAGE are Amar Sinha, former economic relations secretary in the MEA and India’s former ambassador to Afghanistan; Preeti Saran, former secretary east in MEA; Chandan Kumar Mondol, director commercial at NTPC Ltd, India’s largest power generation utility; Rakesh Nath, former chairman of Central Electricity Authority, the apex power sector planning body; Anil Sardana, managing director, Adani Power; and Deepak Amitabh, chairman and managing director, PTC India Ltd, the country’s largest electricity trader.

“The idea is to see how best we can cooperate with each other so that energy shortage is reduced. It is for the benefit of all and to ensure that climate change concerns are also adequately addressed," Shahi told Mint.

While India has been procuring hydropower from Bhutan, it is also supplying electricity to Bangladesh and Nepal. The plan now is to include the option of building an overhead electricity link with Sri Lanka. India is trying to create a common pool for neighbouring countries and has an installed power generation capacity of 373.43 gigawatts.

Speaking at Mint’s annual energy conclave in March last year, power and new and renewable energy minister Raj Kumar Singh said he aims to have a regional power grid and market, which includes Myanmar, Bhutan, Bangladesh, Nepal and Sri Lanka.

India is already moving ahead with its ambitious global electricity grid plans to roll out a “One Sun, One World, One Grid" (OSOWOG). The global grid plan has been spread across three phases. The first phase deals with the Middle East-South Asia-South-East Asia (MESASEA) interconnection for sharing green energy sources such as solar for meeting electricity needs, including peak demand. The second phase connects MESASEA grid with African power pools; the third and final phase is about global interconnection.

India has already notified cross-border trading regulations. The proposed market, which will include Myanmar, Sri Lanka, Nepal, Bhutan and Bangladesh, could aid regional peace and improve utilization of generation assets—including the stranded assets in India—and efficient price discovery.

“There is an urgent need, and a tremendous scope, for enhancing per capita consumption of energy, particularly electricity, in South Asia, for its overall development. Towards this end, mutual cooperation among South Asian nations can lead to optimal solutions with benefits to all, besides also addressing climate change concerns." the government document said.

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