The United States' increasingly assertive stance on Venezuela could create favorable conditions for India through lower oil prices and renewed foreign investment flows, according to market expert Rajeev Agrawal from DoorDarshi India Fund.

Venezuela Oil Impact on Global Markets

Speaking to ET Now, Agrawal highlighted that Trump's recent comments signal a clear shift in US approach toward Latin American countries, particularly Venezuela. The country holds the world's largest oil reserves, presenting significant implications for global energy markets.

"As more oil eventually comes into the market, it should put downward pressure on oil prices, which is positive for the global economy," Agrawal explained. Lower oil prices would particularly support growth across emerging markets, including India.

Aggressive US Rate Cuts Expected

Agrawal anticipates the US Federal Reserve will implement more aggressive rate cuts in 2026 than markets currently expect. The US had three rate cuts in the previous year, but changing Fed leadership could accelerate this trend.

"With a new Fed governor being appointed this year, pressure to support growth will be high. I would not be surprised if rate cuts exceed three," he stated. Lower US rates could improve global liquidity conditions and drive capital flows back toward emerging markets.

India's FPI Revival Prospects

India may regain favor with foreign portfolio investors after underperforming other emerging markets. Agrawal noted a crucial distinction in FPI composition that could work in India's favor.

"Last year, money moved out of India into other emerging markets, but those markets have rallied sharply and valuations are no longer as attractive," Agrawal observed. With continued structural reforms and improving growth visibility, India may start looking relatively more attractive again.

Strong Growth Outlook Maintained

Despite global uncertainties, tariffs, and currency fluctuations, Agrawal remains optimistic about India's medium-term growth prospects. He emphasized the distinction between nominal and real GDP performance.

"India is already clocking around 7.40% GDP growth. With ongoing reforms, I would not be surprised if India sustains 7% plus real GDP growth over the next few years," he said. The recent rupee depreciation, while affecting dollar-denominated GDP, could enhance India's competitiveness in global trade.

Corporate Earnings Recovery Expected

Corporate earnings growth, which has remained muted recently, is likely to improve as consumption strengthens and infrastructure spending gains momentum. Agrawal expects this improvement to reflect in earnings as economic activity picks up.

Regarding US investment feasibility in Venezuela's oil sector, Agrawal noted that private companies would require strong government backing, including defense and operational guarantees. With the US Navy already active in the region, such assurances appear possible, pending upcoming meetings between policymakers and oil executives.

President Donald Trump's administration has issued comprehensive demands to Venezuela's interim leadership, requiring the country to exclusively partner with the United States on oil production and sever economic ties with China, Russia, Iran, and Cuba. The demands come after Trump announced that Venezuela will transfer between 30 and 50 million barrels of high-quality oil to the United States, valued at up to $2.80 billion, following a deadly US military operation that captured former leader Nicolás Maduro.

Enhanced US Strategic Demands and Economic Control

According to ABC reports citing three unnamed sources familiar with the matter, Trump has instructed Venezuela's interim leader Delcy Rodriguez that her government must only collaborate with the US on oil production and give preference to the US when selling heavy crude. The administration is demanding that Venezuela kick out these four countries and sever economic ties entirely.

In the latest development, Trump has announced that Venezuela will be required to use all funds generated from the new oil deal to purchase exclusively American-made products. This includes US agricultural goods, medicines, medical devices, and equipment to upgrade its electric grid and energy facilities, further tightening economic control over Venezuela's spending.

Any move to cut ties would represent a complete political realignment for Venezuela, which has heavily relied on China, Russia, Iran, and Cuba for economic and security stability under both Nicolás Maduro and his predecessor Hugo Chavez. According to a separate New York Times report citing unnamed US officials, Washington is urging Rodriguez to expel military personnel and spies from those nations, though certain diplomats would be permitted to remain.

Military Operation and Casualties

The strategic demands follow a deadly US military operation that successfully captured Maduro. Venezuelan officials announced that at least 24 Venezuelan security officers were killed during the overnight operation, while Cuba's government confirmed 32 Cuban military and police officers working in Venezuela were killed in the raid. Seven US service members were injured, with five returning to duty and two continuing recovery from gunshot wounds and shrapnel injuries.

Oil Deal and Corporate Engagement

Trump outlined the oil arrangement through his Truth Social platform, stating Venezuela will begin by supplying the United States with up to 50 million barrels of oil, valued at up to $2.80 billion at current benchmark pricing for West Texas Intermediate. The oil will be transported using storage ships directly to US unloading docks, with proceeds benefiting both Venezuela and the United States. Trump stated the oil would be sold at market price.

The White House has organized an Oval Office meeting with oil company executives, including representatives from Exxon, Chevron, and ConocoPhillips, to discuss Venezuela operations. The administration plans to meet with US oil companies within the next week to explore investment in the South American country.

Political Response and Future Implications

Venezuela's acting president Delcy Rodriguez has pushed back against Trump's warnings, stating that her destiny is determined by God rather than external threats. While senior US officials have said the US doesn't seek to occupy Venezuela, Trump has repeatedly made clear his intention to play a leading role in steering the country's future, with much of that future financed by oil revenues.

The White House did not immediately respond to requests for comment on the ABC report. The arrangement represents a significant shift in US-Venezuela relations following Maduro's capture, with Maduro having been indicted in the United States on charges of narco-terrorism and international cocaine trafficking conspiracy.