India's Stake in Venezuela

Here's an view you don't see much: the Indian perception of political change in Venezuela. Venezuelan stability matters to India, which imports 11.4% of its oil from there, a number that has been increasing in recent years. Indian companies are also having trouble getting their money out.

Indian pharmaceutical companies are also present in Venezuela. They have leveraged the shortage of basic medicines in that country, which the Venezuelan Pharmaceutical Federation estimated to be as much as 70%. The implementation of much-needed economic reforms, particularly the devaluation of the local currency (the Bolivar), will impact Indian companies that do business with Venezuela, like Dr. Reddy’s, Glenmark and Claris Injectables. These companies export so much to Venezuela, that its politics have an impact on their share price. Already, the shares of Glenmark pharma and Dr. Reddy’s fell by roughly 5% and 2% shortly after Venezuela’s elections, due to expectations of a currency devaluation. Indian pharma, which exported more than $140 million to Venezuela in 2014-15, has been unable to repatriate funds from their Venezuelan subsidiaries for about two years now. 

There is little the Indian government can do to resolve this issue, and the issue is likely to persist until the economy further stabilises and currency controls are lifted. Unlike China, which loans billions to Venezuela and arranges currency swap deals to safeguard bilateral transactions, India’s relationship with Venezuela is cordial but lacks the vigour to arrive at similar deals. Even if such reforms are passed by Caracas, they are unlikely to affect India or the India-Venezuela bilateral much, since our engagement is limited mostly to oil. India is a major buyer; Venezuela is a major seller. For now, that supersedes everything else.

The last sentence says everything. India needs Venezuela for oil, and that drives policy.