Crisil Says Venezuela Crisis Won’t Impact India Inc or Trade

Crisil Ratings has said that the recent US military action in Venezuela is unlikely to have any meaningful impact on India’s global trade or on the credit quality of Indian companies, as the country’s economic exposure to Venezuela remains limited.

In a credit alert issued on Tuesday, the rating agency noted that even if the situation in Venezuela were to escalate and disrupt crude oil production, the impact on global oil prices is expected to be limited and short-lived. This is because Venezuela accounts for only about 1.5 per cent of global crude oil supply, which reduces the risk of any prolonged turbulence in international oil markets.

Brent crude prices have remained largely stable in recent days, hovering slightly above USD 60 per barrel, indicating that markets are not pricing in any major supply shock at the moment.

Crisil also pointed out that India’s direct trade exposure to Venezuela is very small. The South American country accounts for less than 0.25 per cent of India’s total imports. Crude oil is the main item India buys from Venezuela, but even here the dependence is limited, with Venezuela meeting only about 1 per cent of India’s total crude oil requirement.

In value terms, crude oil and related products made up more than 90 per cent of India’s total imports from Venezuela, which stood at around Rs 14,000 crore in the financial year 2025.

India, which imports nearly 85 per cent of its crude oil needs, is generally sensitive to global price movements and supply disruptions. However, Crisil believes the current situation in Venezuela does not pose a serious near-term risk.

“While we do not anticipate any material near-term impact of the Venezuela situation on crude oil prices, investments aimed at increasing crude oil production in Venezuela, which has vast untapped reserves, could actually boost global supply over the medium to long term,” the agency said. Such a development could lead to softer crude oil prices, which would be a positive outcome for Indian companies and the broader economy.

On the exports front, India’s shipments to Venezuela are also relatively insignificant. Exports were under Rs 2,000 crore in fiscal 2025, accounting for less than 0.1 per cent of India’s total exports. These exports are spread across sectors such as pharmaceuticals, ceramics, textiles and two-wheelers.

Pharmaceutical products formed the largest share, at around Rs 900 crore in the last financial year. Even so, this represents less than 0.5 per cent of India’s total pharmaceutical exports, underlining the limited exposure of Indian drug makers to the Venezuelan market. Exports of ceramics, textiles and two-wheelers were even smaller in comparison.

Taking all these factors into account, Crisil said it does not expect any material impact on the credit profiles of Indian companies that do business with Venezuelan customers. “Their exposure is modest, and the overall risk remains contained. That said, we will continue to closely monitor the developments,” the agency added.

The assessment comes in the backdrop of the United States launching military action in Venezuela on January 3, 2026, during which the country’s then president, Nicolas Maduro, was captured.

According to data published by the Organization of Petroleum Exporting Countries (OPEC), Venezuela holds one of the world’s largest crude oil reserves, estimated at about 303 billion barrels, which is nearly 19 per cent of global reserves. Despite this massive resource base, years of underinvestment and operational challenges have kept its actual production and exports far below potential.

For now, Crisil believes that the limited trade links and the small share of Venezuela in global oil supply should shield India and Indian companies from any serious fallout from the unfolding geopolitical developments.