India has released new rules governing the trade of electricity across its borders. They define the contours of South Asian electricity markets, placing clear limits on who can buy from and sell into India. The new rules show that India’s approach is unmistakably political. It attempts to balance China’s growing influence in the region with developmental aims, both its own and the region’s.
Rules strongly discourage the participation of the plants owned by a company situated in third-country with whom India shared a land border and does not have a Bilateral agreement on power sector co-operation with India.
The rules places severity restrictions on tri-parties trade (third-party), say from Bhutan to Bangladesh through India territory.
Establish elaborate surveillance procedures to detect changes in the ownership patterns of entities trading with India.
To make this dream come true, India needs to have impartial institution mechanism for planning, investment, and conflicts resolution are crucial to multi-country power pools. Although, after 2014 India taken some steps to liberalize electricity trade through SAARC and allow private sector participation but exclude Chinese investment.