US President Donald Trump sent shockwaves around the world when he launched airstrikes against Venezuela and captured its president on charges of narco-terrorism and drug-trafficking. With Venezuela being the country with the largest oil reserves in the world, the situation calls for a look at how India will be affected by this US action in the South American country.
Economic think tank Global Trade Research Initiative (GTRI) believes that the impact of the US-Venezuelan conflict on the Indian economy will be negligible.
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“India faces a negligible impact as trade with Venezuela has collapsed due to sanctions, oil imports are down 81.3 percent in fiscal 2025 and overall bilateral trade remains marginal,” GTRI founder Ajay Srivastava was quoted as saying by PTI.
History of India-Venezuela trade
Between 2000 and 2010, India bought huge amounts of oil from Venezuela, more than 400 thousand barrels every day at the height of this trade relationship. But since US sanctions against the country in 2019, those trade volumes have fallen sharply as India has cut back on oil imports and curbed business activities in the country to avoid secondary US sanctions, Srivastava said.
India’s total import from Venezuela was $364.5 million in FY2025. Of that, $255.3 million was for oil, down 81.3 percent from $1.4 billion in oil imports in fiscal 2024.
In terms of exports, the amount was only $95.3 million, of which $41.4 million was pharmaceuticals.
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“Given low trade volumes, existing sanctions restrictions and large geographical distance, current developments in Venezuela are not expected to have any significant impact on India’s economy or energy security,” PTI quoted Srivastava as saying.
Venezuela owns about 18 percent of the world’s oil reserves, more than Saudi Arabia (about 16 percent), Russia (about 5-6 percent) or the United States (about 4 percent).
India Can Really Gain From US Control Of Venezuela Oil: Report
The US-led takeover of Venezuela’s oil sector could have a positive impact on India, according to industry sources and analysts spoken to by PTI.
The US move could potentially free up around $1 billion in long-pending dues for India. Moreover, oil production in Venezuela’s oil fields, in which India has a stake, could be revived under US leadership.
India’s ONGC Videsh Ltd (OVL) has a 40 percent stake in the San Cristobal oil field in the eastern part of the country. However, US sanctions have blocked its access to essential technologies, services and equipment, stranding otherwise commercially viable reserves.
Venezuela failed to pay OVL $536 million in dividends through 2014, as well as a similar amount for the following period when the country refused to authorize audits, freezing the settlement of Indian claims.
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Once the sanctions are eased, OVL may move rigs and other equipment from places such as its parent ONGC’s oil fields in Gujarat to San Cristobal to revive production, which has fallen to 5,000-10,000 barrels a day, officials familiar with the matter said.
The onshore field can produce 80,000 to 1,00,000 bpd with more wells and better equipment, they said, adding that San Cristobal needs rigs similar to those operating in Gujarat, and Oil and Natural Gas Corporation (ONGC) owns many such rigs.
