Some good, some bad: How Indian firms and energy security could be affected by US “running” Venezuela after taking Maduro into custody
&imwidth=600&imheight=450&format=webp&quality=medium "Some good, some bad: How Indian firms and energy security could be affected by US “running” Venezuela after taking Maduro into custody")
Venezuala leader Maduro in a plane after his extraction, and a PDVSA truck are seen in this combo Photograph: (Others)
Capture and trial of Maduro and subsequent US actions in Venezuela could reshape oil flows, affect Indian energy and pharma firms. it could be beneficial if Indian oil firms get stuck dues and global oil supply eases. But instability could be a problem. What's in store?
India was among the largest buyers of Venezuelan oil before US sanctions sharply curtailed trade. Imports largely halted after 2020 amid American sanctions and military actions, which culminated in the removal of its president Nicholas Maduro, who will now stand trial in the US. Several Indian companies – both state-owned and/or listed – have been in business with Venezuela, particularly in the oil and gas sector. After the extraction of Maduro to the US, President Donald Trump revealed plans to “run” the Latin American country. Any such major change would have both short- and long-term consequences for the Indian companies as well as its energy security. Some of it could be actually positive. Here is a roundup:
India and developments in Venezuala
Indian markets appear to have largely shrugged off, or factored in, developments related to Venezuela. Oil-linked stocks such as Reliance showed strength, reflecting potential upside rather than immediate losses. But in the long term, if the US gives priority to American firms, it might limit Indian companies' gains.
Indian companies in the oil and gas sector with exposure to Venezuela
ONGC Videsh, an unlisted subsidiary of state-run Oil and Natural Gas Corporation, has stakes in two Venezuelan oil projects: 40 per cent in the San Cristóbal field and 11 per cent in Carabobo-1. The state-owned and listed Indian Oil Corporation (IOC) is a consortium partner in the Carabobo heavy-oil project with equity participation. Oil India, a listed Indian state-run oil company, is a minority partner in a Venezuelan oil joint venture alongside ONGC Videsh and IOC.
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In the private sector, Reliance Industries has been a major importer of Venezuelan crude in the past, with its refineries optimised for heavy oil processing. Mangalore Refinery and Petrochemicals (MRPL), a listed firm, has historically imported Venezuelan oil, while Nayara Energy, an unlisted company, has imported heavy crude from Venezuela in earlier periods.
Indian pharma sector firms with exposure to Venezuela
Several pharma companies, mostly listed in the Indian stock market, have business interests in Venezuela. Their stocks could be partially affected by any disruption or revival of trade.
Sun Pharma operates a registered subsidiary in Venezuela. Cipla has exported essential medicines to Venezuela, while Glenmark Pharma operates through a locally registered subsidiary. Smaller unlisted firms such as Addii Biotech, JoinHub Pharma, and Salvavidas Pharma have been involved in pharma exports, contributing to millions of dollars in annual pharma trade with Venezuela in recent years. Dr Reddy’s had a subsidiary in the country but divested its operations by 2024, resulting in minimal ongoing exposure.
Metals, industrial and engineering sector firms exposed to Venezuela
Public-sector firm Engineers India (EIL) has had an overseas office in Caracas to support its international business. Jindal Steel and Power has had iron-ore exposure in Venezuela through overseas assets, though operations have been inconsistent. Bajaj Auto had a historical presence in the Venezuelan motorcycle market, but recent years have seen limited operations due to the country’s economic conditions.
Also read: 'Capture of Nicholas Maduro': Is it legal to kidnap a 'President' of another country like Venezuela?
Macro impact and energy security future of India in wake of Venezuela developments
Indian imports from Venezuela have declined by over 90 per cent since 2019 due to sanctions. This means that while individual firms with exposure might be affected, India’s overall energy security or economy are unlikely to take a major hit from developments involving Venezuela.
On the other hand, India could benefit if Venezuela’s oil production and exports increase following sanctions relief or improved Amercian engagement.
Future of Venezuela's oil industry: Will India be affected?
Venezuela has been exporting roughly 700,000–900,000 barrels per day in recent years, largely to China. If the US helps improve oil infrastructure, output could rise over time, which would ease global supply pressures on oil.
If US sanctions on the Venezuelan oil industry are lifted, India could also recover a portion of stuck dues and dividends owed to ONGC Videsh. Refiners such as Reliance, Nayara and MRPL could benefit from renewed access to discounted heavy crude, potentially improving margins.
If production stabilises, both IOC and Oil India might be able to move forward with their joint ventures.
Indian pharma sector could be affected in long term
Pharma and engineering could be a different story. Sun Pharma, Cipla, Glenmark and smaller exporters might face short-term disruptions. If US–Venezuela ties improve, it could enhance market access for essential medicines over time. But again, if American pharma firms enter Venezuela market, Indian companies could face tough competition.
Iron-ore operations could remain vulnerable to political or port-related disruptions, though this exposure is not core to the overall business of Indian firms involved.
