Crisil: US Action in Venezuela Unlikely to Shake India's Trade Stability

Crisil Ratings predicts minimal impact on India's international trade and corporate credit quality from US actions in Venezuela. Despite potential disruptions to Venezuelan crude oil production, India's limited imports mitigate risks. Continued monitoring is advised as even slight global crude shifts affect Indian markets.

Crisil Ratings has assured that the recent US military intervention in Venezuela is unlikely to significantly affect India's global trade dynamics or the credit quality of its corporations. The agency points out that even if the unrest escalates to affect crude oil production in Venezuela, this South American nation contributes only 1.5% to the global oil supply. Consequently, any turmoil is unlikely to cause significant fluctuations in crude oil prices, offering a protective buffer for India Inc.

Recent trends have shown Brent crude oil prices holding steady just above USD 60 per barrel. Additionally, India's direct trade engagements with Venezuela are minimal, making up less than 0.25% of its total imports, with crude oil being the predominant import. In fiscal 2025, India's imports from Venezuela reached a value of Rs 14,000 crore, dominated by crude oil and related products.

While oil imports account for 85% of India's needs, making it sensitive to international price swings and supply disturbances, Crisil sees no immediate threats to Indian market stability from the Venezuelan chaos. Investments in Venezuela to tap its vast oil reserves could ultimately boost global supply, potentially easing prices. India's exports to Venezuela are limited, valued under Rs 2,000 crore for fiscal 2025, spread across pharmaceuticals, ceramics, textiles, and two-wheelers.

(With inputs from agencies.)