Weeks, after Western officials threatened Indian companies with sanctions for supplying Russia with items and technology that could end up supporting Russia’s military-industrial base, a recent report by the UK financial daily The Financial Times, has claimed that Russia is secretly acquiring critical electronics from India to support its war machinery in Ukraine.
The report came at a time when Prime Minister Modi had visited Russia and Ukraine in his bid to bring both warring parties to the negotiation table.
Currently, Russia is under stringent Western sanctions, depriving it of acquiring complex technologies.
FT cited a leaked Russian state correspondence and unnamed Western officials and claimed that Russia is evading Western sanctions by acquiring these critical electronics from India and has also set up a covert trade route to obtain them.
These components include parts which are used for telecommunication, servers and complex electronic equipment that are primarily under Western export controls.
It is important to note that Russia needs these electronics for the functioning of its missiles, drones and electronic warfare equipment making them important for Russia at a time when it is engaged in a more than 2-year-long proxy war with its western adversaries.
The FT noted that the booming oil trade between Russia and India as well as the huge sum of Indian Rupees amassed by Russia through this is helping Russia to run its secret trade with India.
Russia’s industry and trade ministry which oversees Russian defence production had in October 2022 drawn up a confidential plan to spend Indian rupees in securing critical electronics from India through channels hidden from Western governments. It also saw India as an alternate market for getting crucial equipment which earlier been imported from other unfriendly countries.
The FT noted that Russia is using a covert and closed payment system with Indian companies to evade Western scrutiny. However, it is not clear how this covert trade plan was executed by Russia but data from the customs filings show that Indian exports of sensitive electronics have significantly increased since the Russia-Ukraine war.
As per media reports, an Indian company named Innovio Ventures had supplied Russia with electronics including drones worth at least $4.9 million.
The same company has also reportedly shipped another $600,000 worth of goods to Kyrgyzstan, a country which has become a backchannel for Russia’s imports of sanctioned items.
As Western sanctions to strangle the Russian economy have come to nothing with Russia adapting to it positively and even experiencing economic growth, the US has now moved to sensitise private companies, including Indian companies to deter them from supplying Russia with items and technology critical for Russia’s warfighting capabilities.
An Indian Express report has cited that US government officials are now threatening Indian companies with sanctions if they supply Russia with equipment that ends up being used in Russian missiles and other defence equipment.
In November 2023, a Bengaluru-based Si2 Microsystems was put under sanctions for allegedly supplying dual-use technology to Russia.
Apart from this, Reuters has also reported in July this year that Wally Adeyemo, the US deputy treasury secretary had warned Indian banks and financial institutions that do business with Russia’s military-industrial base to risk losing access to the US financial system.
The US has been critical of India’s continuous trade with Russia, especially for buying unprecedented amounts of oil citing that it is helping Putin to fund his war in Ukraine. Despite this, India continued to buy Russian oil and even overtook China as the world’s biggest importer of Russian oil in July this year.
India has defended its discounted oil imports from Russia and even has attacked Europe pointing out its double standard given that Europe’s energy needs are still met by Russia via indirect routes. In 2023 Europe bought a record amount of Russian oil via India despite the Ukraine war.
