Nepal and India signed a landmark 10-year power trade agreement worth $500 million on Monday. Under the deal, Nepal will export 1,500 megawatts of surplus hydropower to the Indian states of Bihar, Uttar Pradesh, and Jharkhand.

The agreement comes as Nepal's installed hydropower capacity has reached 5,000 MW, creating a significant surplus during the monsoon season. Energy Minister called it a transformative moment for Nepal's economy.

The deal is expected to generate over $500 million in revenue for Nepal over the contract period, making electricity the country's second-largest export after remittances.

Private hydropower developers expressed relief at the guaranteed export market, which will improve the financial viability of several ongoing dam construction projects across the country.