The Central Electricity Regulatory Commission’s order in July 2025, approving the implementation of market coupling, marks a pivotal milestone in India’s journey towards a more integrated, transparent and efficient power market.
Market coupling will initially be introduced for the day-ahead market starting January 2026 in round-robin mode, with each exchange acting as a market coupling operator on a rotational basis. Based on its impact, market coupling may be considered for the real-time and term-ahead markets.
This move will lay the groundwork for the long-envisioned market-based economic dispatch (MBED). While market coupling ensures a uniform market-clearing price across exchanges, MBED will go further by centralising dispatch decisions at the national level, enabling the most efficient generators to run first, regardless of PPAs or state boundaries.
For the power sector, market coupling will build trust in transparent price discovery and facilitate more competitive trading. Moreover, MBED, when implemented, will reshape generation economics, state-centre coordination, and how India meets its clean energy targets.
Market coupling is the first of a range of reforms that will deepen the power markets. As India moves toward larger capacities of renewable energy, growing electricity demand and more behind-the-meter assets, a fair and transparent market is essential. Market coupling, and eventually MBED, will help ensure efficient dispatch, better price signals and a more responsive, future-ready power system.