"Preliminary discussions have started and we are yet to draw up full fledged plans on the proposed grid," Power and Coal Minister Piyush Goyal said here.
Through the SAARC grid, excess production of power in one region can easily be used to meet deficit elsewhere.
He said that hydroelectric power generated in North East India could be transported via Bangladesh, India and Pakistan, on to Afghanistan, or offshore wind projects could be set up in Sri Lanka's coastal borders to power Pakistan or Nepal.
The Power Minister further stated that economic sustainability of SAARC region is based on energy security as 30 per cent of the region's energy demands are met through imports.
In order to improve the situation, Goyal advocated a three pronged strategy by leveraging -- harnessing conventional and renewable sources of energy, building inter-connected transmissions grids and forging efficacious power trading agreements.
SAARC is a robust market but constraints are primarily on the supply side as there are pockets where deficits persist, Goyal said.
He called upon all member countries to take this as a challenge and we all should commit ourselves for pushing up household per capita consumption.
For rapid progress and prosperity of the SAARC region , it is imperative that the power sector be expanded to ensure universal access to electricity in the region, Goyal added.
He said: "Our Government recognises the enormous potential of SAARC nations and we believe SAARC can be regional economic powerhouse.