In a dramatic escalation, the United States under President Donald Trump has launched military strikes against Venezuela and apprehended its president on allegations of narco-terrorism and drug trafficking. This action against the nation holding the world's largest oil reserves has sent global shockwaves, raising immediate questions about the repercussions for major economies like India.
GTRI Analysis: Minimal Economic Impact on India
According to a detailed assessment by the economic think-tank Global Trade Research Initiative (GTRI), the direct economic fallout for India from the US-Venezuela conflict is expected to be negligible. This conclusion stems from the already severely diminished trade relationship between the two countries.
"India faces negligible impact, as trade with Venezuela has collapsed under sanctions, with crude imports down 81.3 per cent in FY2025 and overall bilateral trade remaining marginal," stated GTRI founder Ajay Srivastava.
The Steep Decline of a Once-Vital Trade Partnership
India's trade history with Venezuela tells a story of a sharp rise and an even sharper fall. During the 2000s and 2010s, India was a major buyer of Venezuelan crude, importing over 400,000 barrels per day at the peak of their energy partnership.
However, the imposition of US sanctions on Venezuela in 2019 forced India to drastically scale back its engagement to avoid secondary penalties. The data is stark: India's total imports from Venezuela stood at just $364.5 million in FY2025, with crude oil accounting for $255.3 million of that sum. This represents an 81.3% plunge from the $1.4 billion in crude imports recorded in the previous fiscal year.
On the export front, India's sales to Venezuela were a mere $95.3 million, which included pharmaceuticals worth $41.4 million. Given these low volumes, existing sanctions, and the geographical distance, experts believe the current crisis will not affect India's economy or energy security.
A Silver Lining: Potential Gains for India Under US Control
Interestingly, analysts point out that a US-led takeover of Venezuela's oil sector could actually yield positive outcomes for India. This scenario could unlock significant financial and operational benefits for Indian interests.
Firstly, it could potentially resolve long-pending dues, releasing around $1 billion for India. A major chunk of this involves unpaid dividends to India's ONGC Videsh Ltd (OVL), which holds a 40% stake in the San Cristobal oilfield in eastern Venezuela. Venezuela owes OVL approximately $536 million in dividends up to 2014, plus a similar amount for subsequent periods where audit permissions were denied.
Secondly, US control could revive production in oil fields where India has investments. Output at San Cristobal has dwindled to between 5,000 and 10,000 barrels per day due to sanctions blocking access to essential technology and equipment. Officials indicate that once sanctions ease, OVL could deploy rigs and equipment from its parent ONGC's fields in Gujarat to San Cristobal.
With enhanced infrastructure, the onshore field has the potential to produce between 80,000 and 100,000 barrels per day. This revival hinges on the US easing the restrictions that have crippled Venezuela's oil industry and frozen India's assets there.
With Venezuela sitting on roughly 18% of the globe's proven oil reserves—more than Saudi Arabia or Russia—the geopolitical stakes are immense. For India, however, the immediate economic link has frayed, turning a potential crisis into an opportunity for recovery of stranded assets and dues.
