Friday, April 24, 2015

India's trade with Venezuela declined in 2014… No surprise..

India's trade with Venezuela declined by 40% reaching 8358 million dollars in 2014 from 14186 million in 2013.  Venezuela remained as India's second largest trading partner in Latin America after having overtaken Brazil in the previous years.

The main reason is the flaa in price of crude oil which forms 99% of India's imports. Still, Venezuela continues to be the top supplier of crude oil from Latin America and will continue in the future too

India's imports in 2014 were 7959 million down from 13940 in 2013.

India's exports decreased by 30% in 2014 to 246 million dollars from 358 million in 2013. This is also not surprising since the Venezuelan economy is in a mess with acute shortage of foreign currency, corruption in the control of allotment of foreign exchange for imports, several different rates of exchanges, over 60% inflation ( the highest in latin America) and mismanagement of the economy. The government keeps the oil export figures as secret and do not publish them. The figures have to be estimated by going to the statistics of importing countries.

The economic situation has got worse with the fall in oil prices and the government has no clue to deal with the crisis at the moment.

But the country has the potential and resources to become prosperous when the politics becomes normal. The country has as much as 300 billion barrels of oil reserves, equivalent to the Saudi reserves. Besides, the country has minerals and agricultural potential.

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