{"id":20412,"date":"2026-07-18T09:54:31","date_gmt":"2026-07-18T04:09:31","guid":{"rendered":"https:\/\/eng.dragonmedia.com.np\/?p=20412"},"modified":"2026-07-18T09:54:31","modified_gmt":"2026-07-18T04:09:31","slug":"indias-power-tender-exemption-for-chinese-linked-firms-creates-opening-to-address-barriers-facing-nepal","status":"publish","type":"post","link":"https:\/\/eng.dragonmedia.com.np\/?p=20412","title":{"rendered":"India\u2019s Power Tender Exemption for Chinese-Linked Firms Creates Opening to Address Barriers Facing Nepal<\/strong>"},"content":{"rendered":"


\nDragon Media News Desk<\/strong><\/p>\n

The Indian government has granted four companies with Chinese ownership or commercial ties a two-year special exemption allowing them to participate in tenders for major government electricity transmission infrastructure projects.<\/p>\n

India\u2019s Department of Expenditure under the federal Ministry of Finance granted the limited exemption in June to TBEA Energy India, Nanjing Electric India, New Northeast Electric India and Taikai Electric India.<\/p>\n

TBEA Energy India is a wholly owned subsidiary of China\u2019s TBEA Group. Nanjing Electric India is also wholly owned by Chinese power equipment manufacturer Nanjing Electric. New Northeast Electric India has a technology-transfer partnership with a Chinese power company, while Taikai Electric India is a subsidiary of the China-headquartered Taikai Group.<\/p>\n

The companies manufacture power equipment in India, including transformers, high-voltage switchgear, gas-insulated equipment and other materials used in electricity transmission systems.<\/p>\n

Following the deadly clash between Indian and Chinese troops in the Galwan Valley of eastern Ladakh in 2020, India introduced strict restrictions on companies from countries sharing a land border with it. Such firms were required to register with the relevant government authorities and obtain political and security clearances before participating in public procurement and contracting processes.<\/p>\n

India has made clear that the latest exemption applies only to the four companies and should not be treated as a precedent for other firms. Since the approval is valid for only two years, it is being viewed less as a broad change in India\u2019s policy toward Chinese companies and more as a practical decision driven by infrastructure requirements.<\/p>\n

Stakeholders in Nepal\u2019s energy sector say the decision provides a new basis for diplomatic efforts to address obstacles linked to Chinese investors, contractors or equipment involved in Nepali hydropower projects.<\/p>\n

Nepal must obtain separate approval from India for each power project seeking to export electricity to the Indian market. India\u2019s procedures for its designated authority contain restrictive provisions governing electricity generated by projects that are owned, effectively controlled or beneficially owned by entities from third countries that share a land border with India but do not have a bilateral power-sector cooperation agreement with it.<\/p>\n

The procedures primarily focus on project ownership, control, the origin of investment and beneficial ownership. They do not clearly state that electricity exports must be blocked merely because a construction contractor was selected through international competitive bidding or because equipment from a particular country was used in the project.<\/p>\n

Nepali developers, however, say India has in practice shown reluctance to approve electricity exports not only from projects with Chinese investment but also from projects involving Chinese contractors or equipment. Although India has not publicly explained its reasons for withholding approval from individual projects, developers have frequently identified Chinese involvement as the main obstacle.<\/p>\n

Nepali hydropower projects importing explosives from India must also obtain a no-objection certificate through the Indian Embassy in Nepal. Energy developers say obtaining new certificates or renewing existing permits has often been difficult for projects involving Chinese investors or contractors.<\/p>\n

Developers further say that India has recently begun requiring documents related to the import of electromechanical and hydromechanical equipment before renewing certificates for explosives. In some cases, they say, authorities have also demanded proof that equipment imports have already been completed.<\/p>\n

Mohan Dangi, president of the Independent Power Producers\u2019 Association, Nepal, said it was impractical to make the renewal of explosives permits conditional on equipment imports because electromechanical and hydromechanical equipment is generally imported only one and a half to two years after civil construction begins.<\/p>\n

\u201cExplosives are required for tunnel excavation and the construction of various civil structures,\u201d he said. \u201cDelays in their supply push construction schedules back, can bring work to a halt and affect the overall progress of projects.\u201d<\/p>\n

Dangi said the private sector had been lobbying on the issue and urged the government to pursue high-level discussions with India.<\/p>\n

Some projects involving Chinese contractors have begun importing explosives from China after facing difficulties obtaining adequate supplies from India. However, developers say this option is also challenging because of longer transportation distances, higher costs, complicated approval procedures and geographical constraints.<\/p>\n

Energy-sector stakeholders frequently cite the 456-megawatt Upper Tamakoshi Hydropower Project as an example of the difficulties encountered in securing Indian approval for electricity exports. Although the project was built with Nepali investment, a Chinese company was involved in its civil construction.<\/p>\n

Indian companies participated in the project\u2019s hydromechanical, electromechanical and transmission-line works, but India has yet to approve electricity exports from Upper Tamakoshi. Nepal has repeatedly raised the issue during meetings of bilateral energy mechanisms.<\/p>\n

Stakeholders argue that, since India has now allowed Chinese-linked companies to participate in tenders for its own sensitive power infrastructure, electricity exports from Nepali-owned projects should not be blocked solely because Chinese contractors were selected through international competition or Chinese equipment was used.<\/p>\n

Former energy secretary Anup Upadhyay said Nepal should use India\u2019s latest decision as an opportunity for diplomatic engagement.<\/p>\n

\u201cIndia has allowed Chinese-linked companies to participate in its own power infrastructure,\u201d he said. \u201cNepal should now clearly ask why barriers remain in the way of our electricity trade and project construction.\u201d<\/p>\n

Upadhyay said the issue should be raised consistently during prime ministerial, ministerial and secretary-level visits, as well as at meetings of Nepal\u2013India energy mechanisms. Any procedural or security concerns, he said, should be resolved through high-level dialogue.<\/p>\n

Although political relations between India and China deteriorated after the Galwan clash, diplomatic engagement, high-level visits and commercial contacts have gradually increased in recent years. Bilateral trade has also expanded significantly.<\/p>\n

India\u2019s decision to allow four Chinese-linked companies to participate in government power tenders is therefore being viewed as another indication of a pragmatic improvement in relations between the two countries.<\/p>\n

However, India\u2019s public procurement policy and its rules governing cross-border electricity trade with neighbouring countries operate under different legal frameworks. The exemption granted to the four companies will therefore not automatically remove all restrictions facing Nepali projects.<\/p>\n

Nevertheless, India\u2019s limited acceptance of Chinese-linked companies in its own critical electricity infrastructure could provide Nepal with an important diplomatic basis for seeking the removal of obstacles relating to electricity exports, explosives permits and contractors selected through international competitive bidding.<\/p>\n

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