In the recent past, ever since Trump’s capture of Venezuelan President Nicolas Maduro, there has been a lot of attention on how the Venezuelan crisis will affect India’s global trade. Crisil Ratings, in a recently published report, said that it does not expect the situation in Venezuela to have any adverse material impact on Indian corporates. This has largely been attributed to India’s relatively modest trade ties with Venezuela.
This is particularly relevant as Venezuela houses 18% of the world’s proven oil reserves and India is a net importer of oil. The US tariff penalty on India for its trade with Russia and declining share of Russian oil as a result puts the spotlight on India.
Crisil in a detailed study highlights why India is relatively shielded from the Venezuelan chaos-
#1 Crisil says Indian markets shielded even in case of disruption
India imports around 85% of its crude oil requirements and is therefore sensitive to global price movements. However, the report noted that Venezuela’s small share in global oil supply limits the impact of any disruption, as India sources only about 1% of its crude oil imports from the country, shielding Indian players from any material adverse impact.
It added that escalations in Venezuela are unlikely to disrupt global crude oil prices, as the country accounts for only 1.5% of total supply.
#2 Crisil says India may benefit from Venezuela’s situation
Crisil, in its report, said that since much of Venezuela’s oil reserves remain untapped, investments to increase crude oil production may soften global prices, thereby helping India. Following the fundamentals of demand and supply, a boost in oil supply would further soften global crude prices.
Prices may remain subdued in the near to medium term, which would be beneficial for Indian corporates, as the country is one of the largest importers of crude oil.
#3 Crisil says Indian imports from Venezuela at insignificant levels
The report noted that Venezuela’s direct trade with India stands at an insignificant level, as India imported just 0.25% of its total imports from Venezuela.Crude oil formed over 90% of these imports, valued at around Rs 14,000 crore in FY25.
#4 Crisil says Indian exports to Venezuela at negligible levels
Crisil pointed out that Indian corporates are likely to see negligible impact even if the situation in Venezuela escalates, as India’s exports to Venezuela make up less than 0.1% of the country’s total exports.
For FY25, Indian exports to Venezuela were valued at under Rs 2,000 crore and spanned across various sectors such as pharmaceuticals, ceramics, textiles, and two-wheelers. For the last fiscal year Venezuela imported products valued at approximately Rs 900 crore.
This accounted for less than 0.5% of India’s total pharmaceutical exports. Further exports of ceramics, textiles, and two-wheelers also stood at modest levels, ranging from Rs 80 crore to Rs 120 crore each.
#5 Crisil says Indian corporates large insulated
With India’s low oil imports from Venezuela and minimal trade exposure, Indian corporations are largely insulated from the ongoing situation in the country, Crisil said. The rating agency further pointed out that Venezuela’s situation may even favour India, as it could help lower global crude oil prices.