Indian government has come up with a barter proposal for the crisis-hit Venezuela for settling the dues of India’s pharmaceutical companies through the oil that it shipped to India.
“The Government of India has put-forth an ‘oil for export mechanism’ between government of Venezuela and Government of India to settle pending payments of pharmaceutical companies,” Commerce and Industry Minister Nirmala Sitharaman said in a written response to the Rajya Sabha.
The Minister said that the proposal tries to find out a mechanism to balance the payments, which are due to be done to the oil firms of Venezuela against the payments due of Indian companies.
“However, the Venezuelan side has not given any response yet,” she added.
The pharmaceutical exporters of India are having problems to get the payments from the crisis-ridden South American country. Venezuela is the biggest trading partner of India in South American region, mainly in oil sector.
Pharmaceuticals Export Promotion Council of India (Pharmexcil), a state-run body for promotion of pharma exports, has already raised the exporters’ concerns over the payments delay and had asked the government to intervene in solving the payments problem with the country.
India is one of the world’s largest importers of oil, along with the US and China. The country earlier also had barter deals with countries like Iran, where it swapped wheat and rice for oil.
The exports from India to Venezuela dropped almost 50 percent to $125.5 million, between April 2015 and February this year as compared to same period a year earlier. Most of the exports from India to Venezuela comprise pharmaceutical products.
The socialist economy of Venezuela is facing triple-digit inflation due to the decline in global oil prices, which also triggered a financial crisis. Inept to pay its dues, the country is going through a severe shortage of even basic goods such as water, food and medicines.