India is using energy diplomacy to complement its domestic clean energy transition. As the country rapidly expands renewable generation capacity and strengthens the transmission infrastructure required to support it, India is also seeking a larger role in regional and international electricity markets. Two elements are central to this strategy: expanding physical interconnections between India’s power grid and those of neighbouring countries, and attracting international capital to finance the domestic and cross-border infrastructure needed for this integration.
This approach has been developing for more than a decade, but its international dimension has become more concrete in recent years. Policy ambitions are now being translated into construction projects, feasibility studies and agreements between utilities and governments. India’s transmission planners have long maintained that, in many cases, transmitting electricity across borders is more economical than transporting fuel to generate power locally. This is particularly relevant for hydropower-rich neighbours such as Nepal and Bhutan, where available resources substantially exceed domestic electricity demand.
Building the regional backbone
India’s geographic position places it at the centre of South Asia’s developing electricity market, as it shares land borders with Bangladesh, Bhutan, Myanmar and Nepal. Greater cross-border electricity connectivity can help meet rising demand, enable countries to make better use of their respective energy resources and reduce overall system costs through resource sharing. It can also support the integration of larger volumes of renewable energy. Over time, a more interconnected regional system could reduce the need for each country to maintain the same level of backup generation capacity by allowing reserves and balancing resources to be shared across a wider network.
According to the Central Transmission Utility of India’s Inter-State Transmission System (ISTS) Rolling Plan 2030-31 (Interim Report), India’s national grid is already connected to all four neighbouring countries through a combination of synchronous and asynchronous interconnections operating at voltage levels ranging from 11 kV to 400 kV. A further electricity interconnection with Sri Lanka is also under consideration.
As of September 2025, India had 10,323 MW of installed cross-border transmission capacity. Bhutan accounts for the largest share with 7,560 MW, reflecting decades of hydropower trade centred on projects such as Tala, Chukha, Kurichhu and Mangdechhu. Power from these projects is transferred to India through seven synchronous 132 kV, 220 kV and 400 kV lines, including the Mangdechhu-Jigmeling-Punatsangchhu I and II-Alipurduar corridor. No new links with Bhutan are currently under construction. The interim report expects the existing network to be adequate once the delayed Punatsangchhu-I project is commissioned, together with the units already commissioned at Punatsangchhu-II.
Nepal has the next-largest existing capacity at 1,600 MW. Most of this is carried by the 400 kV Dhalkebar-Muzaffarpur line, along with smaller radial connections operating at 132 kV and below. Nepal is also seeing the largest expansion in cross-border transmission capacity. About 8,100 MW is under construction, including the Sitamarhi-Dhalkebar, Gorakhpur-New Butwal and Nanpara-Kohalpur lines. A further 5,350 MW is under discussion, covering new 220 kV and 400 kV corridors and the re-conductoring of the existing Muzaffarpur-Dhalkebar line with high-temperature, low-sag (HTLS) conductors. This would increase the line’s transfer capacity without requiring the existing towers to be rebuilt. Once the planned projects are completed, Nepal’s cross-border capacity is expected to increase more than ninefold to over 15,000 MW, making it India’s largest interconnection partner by 2030-31, ahead of Bhutan.
India currently has 1,160 MW of interconnection capacity with Bangladesh through the 400 kV Baharampur-Bheramara line, which uses back-to-back (B2B) high-voltage direct current (HVDC) conversion because the two grids are not synchronised, and a smaller 132 kV Tripura-Comilla radial connection. A planned 765 kV Katihar-Parbatipur-Bornagar line would add another 1,000 MW. The project is being financed and built entirely from the Indian side and would be used once Bangladesh synchronises with the Indian grid at an appropriate time. Separately, Adani Power’s 1,600 MW Godda plant in Jharkhand supplies Bangladesh through a dedicated 400 kV line. This connection bypasses the Indian grid and operates as a radial, point-to-point export arrangement rather than a conventional grid interconnection.
The link with Myanmar remains the smallest, with only 2-3 MW transferred through an 11 kV radial connection between Moreh in Manipur and Tamu. Plans are in place to increase this capacity, including an Imphal-Tamu high-capacity AC line and a 500 MW HVDC B2B station. Several smaller 11 kV radial connections to border villages in Arunachal Pradesh, Manipur, Mizoram and Nagaland are also proposed, taking planned capacity to 504 MW.
Sri Lanka does not currently have a cross-border interconnector with India. A proposed ±320 kV, 1,000 MW HVDC link between Madurai and Mannar is under discussion. The project would be developed in two 500 MW phases, with voltage-source-converter terminals at both ends and would provide India’s first subsea cross-border transmission link.
Overall, the interim report projects India’s total cross-border transmission capacity to reach nearly 25,800 MW by 2030-31, more than twice the September 2025 level.
India’s transmission expansion is also creating opportunities for multilateral power trade. In October 2024, Nepal, India and Bangladesh signed a tripartite agreement allowing Nepal to export hydropower to Bangladesh using India’s transmission network. It was the first arrangement of its kind in South Asia, enabling electricity from one country to reach a third country through another country’s grid. Under the agreement, Nepal exports 40 MW to Bangladesh during the wet season, from June 15 to November 15. The power is transmitted through the Dhalkebar-Muzaffarpur line in Nepal and the Baharampur-Bheramara line on the Bangladesh side. The arrangement has already faced transmission constraints. In 2025, India’s Central Electricity Authority (CEA) did not approve a proposal to increase exports to 60 MW, citing limited capacity on the line to Bangladesh. Flooding in Nepal has also disrupted generation and exports at times.
OSOWOG and the push into the Gulf
India’s most ambitious initiative in cross-border grid diplomacy is the OSOWOG vision. First proposed alongside the International Solar Alliance (ISA), which India and France launched at COP21 in 2015, OSOWOG envisages a globally interconnected electricity grid that would allow solar power generated in one time zone to supply electricity to another where it is still night. India later brought the initiative together with the UK’s Green Grids Initiative at COP26 in November 2021, creating the Green Grids Initiative-OSOWOG, with institutional support from the ISA and the World Bank.
India has since moved beyond establishing institutions and frameworks to exploring specific interconnection projects. In October 2023, India and Saudi Arabia signed an MoU to connect their power grids, followed by a similar agreement with the UAE in February 2024. An initial feasibility study examined a roughly 1,000 km HVDC subsea cable from Gujarat to Oman as a possible first phase of a wider Middle East-Gulf Cooperation Council (GCC) power link.
More recent plans focus on direct subsea connections between India and Saudi Arabia and between India and the UAE. The two projects are estimated to cost around Rs 900 billion in total, with each designed to transmit about 2 GW. The proposed Saudi Arabia link alone is estimated to cost around Rs 470 billion and would run for approximately 1,400-1,700 km under the Arabian Sea. Central Transmission Utility of India Limited and the Saudi National Electricity Transmission Company have agreed to jointly examine the feasibility of an electrical interconnection. The proposed India-UAE link would run for about 1,600 km from Gujarat to Dubai and cost an estimated Rs 400 billion. The connection is planned to operate in both directions. India could export surplus renewable power to the Gulf when domestic generation is high, and import electricity when demand rises or renewable output falls. In January 2026, the UAE state utility Etihad Water and Electricity invited consultants to bid for a techno-economic feasibility study covering the proposed subsea interconnector, including route selection, cost-benefit analysis and commercial arrangements.
Conclusion
Taken together, these developments point to a strategy centred on physical connectivity rather than diplomacy alone. India’s existing cross-border transmission network already enables power trade with Bangladesh, Bhutan, Myanmar and Nepal, with total capacity expected to reach nearly 25,800 MW by 2030-31 as projects involving Nepal, Bangladesh and Sri Lanka are added. The Nepal-Bangladesh hydropower arrangement also shows how a shared transmission network can support trade between two countries other than India. Although the current arrangement involves only 40 MW, it provides an early example of how third-country power trade could develop as regional interconnections expand. The push towards the Gulf under the OSOWOG initiative is a much larger undertaking. What began largely as an institutional framework involving the ISA and the Green Grids Initiative has progressed to feasibility studies, cost assessments and agreements between utilities in India, Saudi Arabia and the UAE. The proposed multi-gigawatt subsea links would take India’s cross-border transmission ambitions beyond South Asia for the first time.
Foreign capital is also playing an important role. India’s domestic policy support and growing engagement with international investors have helped sustain foreign investment in renewable energy, even as global investors have become more selective about emerging markets. The renewable energy sector received $12,674 million in foreign direct investment (FDI) between April 2020 and March 2025. Several major renewable energy developers have also attracted direct investment from global pension funds and sovereign wealth funds. This reflects growing interest among long-term institutional investors in India’s renewable energy market and the broader infrastructure needed to support its expansion, including regional transmission links.
There are, however, significant uncertainties around the timing of these plans. The Nepal-Bangladesh power trade has already faced transmission constraints and disruptions caused by flooding, highlighting the operational challenges that can affect cross-border trade. The proposed Gulf links are still at the feasibility-study stage, and given the volatility of the wider region, spanning shipping lanes, energy infrastructure and geopolitics around the Strait of Hormuz, timelines for these subsea projects could still face delays.
Even so, India’s direction is becoming clearer. The country is increasingly treating its transmission network not only as infrastructure for its domestic energy transition, but also as a means of expanding regional electricity trade and building longer-term energy partnerships beyond South Asia.
