US Attack On Venezuela May Push India To Expand Local Currency Trade

Amid the ongoing crisis in Venezuela, India may have to aggressively push trade in local currencies to provide the necessary cushion to the rupee, which, recently, breached the 90-to-a-dollar mark

Jan 06, 2026 · 3 min read

Venezuela, President Nicolás Maduro, US President, Donald Trump, local currency, Indian rupee, rupee

The Indian rupee, Asia’s worst-performing currency in 2025, will face more headwinds in the near future following the US’s direct intervention in Venezuela. Sources say that India may have to aggressively push trade in local currencies to provide the necessary cushion to the rupee, even as the Reserve Bank of India (RBI) is expected to continue its intervention.

This will not only help India to prop up its own currency but also provide the necessary cushion to the foreign exchange reserves, which were just a tad short of the $700 billion mark as of December 26, 2025.

However, what is important to note is that crude oil prices may weaken due to oversupply in the global markets. Although Brent crude price on Monday showed an increase of about 0.5%, it hovered around $60.8 a barrel, while West Texas Intermediate (WTI) stood at $57.5 a barrel.

Thrust On Local Trade Currency

“India will have to actively push for local currency trade. With the rise in geopolitical risks, it is important to press all levers to protect the economy and the currency; it is not just about oil prices and availability,” an analyst said.

India imports about 85% of its crude oil requirements. The strengthening of the US dollar, therefore, would mean that India will have to pay more. This could erode the advantages of low crude prices in the global market.

Rupee To Be Under Pressure

The dominance of the Petrodollar — the US dollar with which oil trade is carried out globally — will increase. The sharp rise in global risks will support the Greenback, leading to the depreciation of the rupee, which touched 90.27 to a US dollar on Monday.

This will bring its own challenges in determining the next financial year’s budget indicators.

However, with India’s trade diversification and its gradual increase of thrust on imports from Russia, there may not be any immediate impact on New Delhi’s crude oil imports or the dynamics.

Rupee Depreciation

The start of 2026 saw the currency breaching the psychological 90-to-a-dollar mark. “The depreciation of the Indian rupee will be sharper than expected amid the Venezuela crisis, but it is unlikely to have any significant impact on the Indian economy and its trade parameters,” Anil Sareen, State Bank of India's former executive (handling currency and forex management), told The Secretariat.

The RBI has been selling dollars through the government-owned banks to help in slowing the rate of depreciation. Without this active intervention, the Indian currency would have breached the 90 mark much earlier, falling more drastically.

Sareen noted that the US's attack on Venezuela was not “a total surprise.” “It has been building up, and I don’t see any major dent in the medium term,” he said.

Venezuela’s Oil Reserves

Trump, following the capture of Venezuelan President Nicolás Maduro, said that Washington would look to have "total access" to Venezuela’s oil reserves.

“We’re going to have our very-large US oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, oil infrastructure, and start making money for the country," Trump said following the attack.