India’s New Power Brokers? Border States and Regional Energy Trade in South Asia

Nimmi Kurian ,Associate Professor, Centre for Policy Research, New Delhi

There are early signs that border states could be emerging as India’s new power brokers with the potential to drive cross-border energy trade in South Asia. This is part of a longer shift in Indian foreign policy towards a greater sub-regional engagement with its neighbourhood. While regional trading blocs and arrangements have been a common phenomenon, both the bilateral and the regional levels have tended to bypass the sub-regional level with its local governance particularities and stakeholders. Initiatives such as the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), the Mekong Ganga Economic Cooperation (MGC), and the Bangladesh-China-India- Myanmar Economic Corridor (BCIM EC) focus inter alia on improving energy infrastructure and promotion of intra-regional power trade. The prospects for a South Asian power grid are also set to get a further boost following the SAARC agreement in 2014 on enhancing integrated power transmission connectivity.

There are interesting examples of a growing engagement by India’s border states with its sub-regional neighbourhood. To understand this, one needs to look at subterranean processes that are bringing together a host of actors with an interest in deepening sub-regional energy integration. These dynamic processes constitute subterranean sub-regionalism; a form of integration that mainstream research and policy has so far not paid adequate attention to (Kurian 2015). There are three reasons why it should begin to do so. Firstly, there is a growing evidence that border regions are beginning to successfully lobby the Indian states for greater access to energy markets across the borders. Secondly, they are on occasion bypassing the Centre and directly forging cross-border issue-based linkages. Thirdly, they are seeking to socialise national policy makers towards a decentred approach to problem solving by building governance capacity at the sub-regional level. The cumulative impact of these processes would be interesting to watch for its capacity to bring the border region centre stage as partners in shaping India’s engagement with its sub-regional neighbourhood.

Local state actors are today demonstrating stamina and resolve for protracted institutional bargaining with the Centre for access to energy markets in the region. For instance, Meghalaya and Tripura have been lobbying the central government to permit export of surplus power to Bangladesh. It is easy to understand why. Selling power to Bangladesh is a far more feasible option since transporting power to the rest of India faces considerable transmission constraints through the narrow 22-km long Siliguri corridor. Power transmission lines from the Surjyamaninagar power grid in western Tripura to Comilla in eastern Bangladesh will supply 100 MW from February 2016. An Indian delegation led by Tripura Power Minister Manik Dey to Dhaka in January 2016 signed a memorandum of understanding to finalise the price of power at Rs 5.50 with transmission to begin in February 2016. This is in addition to the 500 MW being supplied through the Baharampur-Bheramara linking West Bengal and Bangladesh since 2013. Meghalaya’s Power Minister Clement R Marak has also been lobbying with the Centre to sell excess power produced in the state especially during the monsoon period when Bangladesh faces high demand for power. Bihar too has been seeking a partnership in the power projects being executed in Bhutan particularly from the Puna Psangchhu hydel project and demanding an equity stake in these to meet the state’s energy demand. Bihar’s Energy Minister Bijendra Prasad Yadav has demanded at least 15,000 MW electricity from the Puna Psangchhu and the Mangdechu hydel projects in Bhutan and 250 MW from the Arun-III hydel project in Nepal (The Telegraph 2015).

Direct trans-border subnational links have on occasion bypassed the Centre to break difficult logjams and bottlenecks. The construction of the 726 MW Palatana gas power project in southern Tripura is a case in point. Palatana will be bookmarked in India’s evolving sub-national cross-border engagement as one of the first instances of a sub-regional approach to problem solving. Since transporting heavy equipment to Tripura was a challenge due to the difficult terrain, Bangladesh allowed transhipment of heavy turbines and machinery through its territory. Bangladesh’s decision to allow transhipment has been a critical factor in the successful completion of the project.

At the end of the day, cross-border energy policy coordination will require institutionalised cross-border governance arrangements and platforms. Recently, District Magistrates and officials from Tripura and Mizoram met their Bangladeshi counterparts to discuss more effective border management mechanisms (Economic Times 2015). Multi-stakeholder platforms such as these will be critical for border states to steer sub-regional conversations on questions such as setting energy policy objectives, rethinking the regional energy mix and ensuring the security of energy supplies among others. Going ahead, there also needs to be a serious engagement with the sort of environmental norms and standards India would like to institutionalise within the sub-region, given that energy as a sector is intrinsically crosscutting in nature. There is for instance widespread concern about the environmental consequences of a joint India-Bangladesh coal-based power project being built close to the Sundarbans mangrove forests. This could offer a sobering cue for subnational India to start raising some of these larger questions of benefit sharing, trade-offs and the allocation of risks and burdens in sub-regional Asia.

References:

Economic Times, 2015. ‘Indo-Bangla Joint Conference to Begin on February 3’, 1 February.

The Telegraph, 2015. ‘Bihar Cry for More Power’, 10 April.

Kurian, Nimmi. 2015. ‘Indian IR’s Subregional Moment: Between a Rock and a Hard Place?’ CPR Policy Brief, November.

 

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