Nepal and India have signed a landmark power trade agreement (PTA) in New Delhi, which is expected to boost the energy ties between the two energy-starved nations.

The two-day meeting ended on Thursday on a positive note with the energy secretaries from both countries signing the agreement, an official source said.

During the visit of Indian Prime Minister Narendra Modi to Nepal in the first week of August, both countries had agreed to complete the negotiations within 45 days.

The agreement will now be forwarded to the respective cabinets of both countries for ratification, the source added.

The agreement has paved the way for a bilateral power trade, whereby energy produced in Nepal by any of the parties will be sold in India.

The proposal of the PTA was made by Nepal. On Wednesday, a seven-member Nepali team led by Nepal’s energy secretary Rajendra Kishore Chettri had arrived in New Delhi to negotiate with the Indian side.

The PTA is crucial for both sides to export and import electricity, fix the price and explore the market as Nepal and India need to do business over the long term.

India had sent a draft power co-operation agreement (PCA) to Nepal on May 9 which provided for power generation, production and trade, and offered full Indian cooperation in generation and production of hydro-electricity in Nepal.

Before the visit of Indian External Affairs Minister Sushma Swaraj to Nepal in the third week of July, the Indian draft was leaked to the Nepali media and some political sections in Kathmandu, provoking a huge uproar.

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