India Moves Toward Unified Power Market as GRID India Backs Coupling Proposal

India's power sector could be on the cusp of its most significant market reform in over two decades, as Grid Controller of India Ltd (GRID India) has backed the introduction of market coupling while urging regulators to build safeguards to protect the country's electricity trading ecosystem.

In its comments on the draft CERC (Power Market) (Second Amendment) Regulations, 2026 , submitted on June 8, GRID India broadly supported the proposal to designate it as the country's sole Market Coupling Operator (MCO) . The move is aimed at creating a unified electricity market with a common price discovery mechanism across power exchanges. However, the state-owned grid operator cautioned that the proposed framework could create a "single point of failure" if adequate contingency measures are not put in place.

Under the draft regulations issued by the Central Electricity Regulatory Commission (CERC) , GRID India would aggregate buy and sell bids from multiple power exchanges and determine a single market-clearing price. The reform seeks to improve market efficiency , enhance liquidity, reduce price disparities across exchanges and strengthen competition in electricity trading.

Market coupling represents the next stage of India's broader electricity sector reforms that began with the landmark Electricity Act, 2003 . The legislation transformed the sector by encouraging private participation, enabling open access, promoting competition and creating independent regulatory institutions. Over the years, India has developed sophisticated power markets, including the Day-Ahead Market (DAM) , Real-Time Market (RTM) , green energy trading platforms and ancillary service markets.

While supporting the proposed framework, GRID India recommended introducing a regulatory fallback mechanism that would allow power exchanges to continue price discovery in the event of a technical disruption at the MCO. The company cited examples from European electricity markets where technical failures led to temporary market decoupling.

The grid operator also called for the institutional ring-fencing of market-coupling functions. It proposed establishing a dedicated unit within GRID India initially and eventually creating a wholly owned subsidiary to independently manage market-coupling operations. To maintain regulatory flexibility, it suggested that CERC retain the power to notify the MCO through regulatory orders rather than permanently naming a specific entity in the regulations.

Among other recommendations, GRID India proposed a Market Coupling Steering Committee comprising CERC, power exchanges, GRID India and independent auditors. It also sought a regulatory framework for inter-exchange financial settlements, mandatory stakeholder consultations, and parallel trial runs before implementation.

As India accelerates power-sector modernization and renewable-energy integration, the success of market coupling will depend not only on unified price discovery but also on robust governance, operational resilience and stakeholder confidence in the country's evolving electricity market architecture.