Indian officials say they have proposed an oil-for-drugs barter plan with cash-strapped Venezuela to recoup millions of dollars in payments owed to some of India’s largest pharmaceutical companies.
Several of India’s generics producers, led by the country’s second-largest player Dr Reddy’s Laboratories Ltd bet heavily on Venezuela as they sought emerging market alternatives to slower-growing economies such as the United States. But the unravelling of Venezuela’s socialist economy amid a fall in oil prices has triggered triple-digit inflation and a full-blown political and financial crisis. Unable to pay its bills, the country is facing severe shortages of even basic supplies such as food, water and medicines. Dr Reddy’s wrote off $65 million in the March quarter, which it said was almost all the money it was owed from Venezuela. Rival Glenmark Pharmaceuticals Inc, another major investor, says it is due $45 million.