The minister said both sides will be in a "win-win situation" if they cooperate to harness Nepal's "God-gifted" hydropower potential.
"Nepal can reduce trade deficit with India by selling energy to it. We should work together for mutual benefits," Abdullah said yesterday while inaugurating a three-day trade expo aimed at attracting Indian investments in Nepal's energy and IT sectors.
Speaking at the trade expo, India's former energy secretary Anil Razdan said Nepal should create an investment-friendly environment to attract Indian investors.
"Political consensus and certainty of law and regulation is a must to draw investment from India in the hydropower sector," he said.
Nepal is rich in water resources with the potential to generate 83,000 MW of hydropower. It currently generates 674 MW of hydropower from the total installed capacity of 705 MW.
Nepal and India are already cooperating in the construction of dams on Bagmati, Kamala and Lalbakaiya rivers.
However in September, the two sides were unable to reach a decision on finalising a detailed project report on the 5,600-MW Pancheshwar multipurpose dam, proposed 15 years ago for sharing power and water on a 50-50 basis.
Work on the dam on the Sarada river has not moved forward due to the political instability in Nepal.