India has emerged as the second-largest supplier of restricted technologies to Russia, raising concerns among U.S. and European officials. These exports are believed to be contributing to President Vladimir Putin’s military efforts in Ukraine, complicating efforts by Western nations to cut off vital supplies to Russia.
Surge in Indian Exports to Russia
Indian exports of restricted items, such as microchips, circuits, and machine tools, have seen a significant rise. In April and May, these exports reached over $60 million, about twice the value from earlier months of the year. By July, the figure surged to $95 million, making India second only to China in supplying such critical technologies to Russia, according to officials familiar with the matter.
Frustration Among Western Allies
Officials working with Ukraine have expressed frustration over India’s growing role in supplying restricted goods to Russia. Despite raising concerns with Indian counterparts, they claim to have received little to no response. India’s Ministry of External Affairs declined to comment on the issue.
According to the data, about 20% of the sensitive technology that supports Russia’s military-industrial complex is believed to be routed through India. This highlights the challenge faced by Western countries in curbing Russia’s war capabilities more than two years after its invasion of Ukraine.
Russia’s Strategy of Acquiring Technologies Through Third Countries
Since direct exports of dual-use items to Russia are banned, the country has turned to third nations to secure these technologies. Russia reportedly acquires these items from intermediaries or even unwitting subsidiaries of Western companies. In response, the U.S. State Department has stated it will continue to raise concerns with Indian officials and companies involved.
New Transshipment Hubs Emerging
As the U.S. and European Union continue efforts to block certain supply routes, new hubs for transshipment have emerged. Besides India, countries like Malaysia and Thailand have become significant points for these restricted goods, adding further complications to the sanctions imposed on Russia. Previously, Turkey and the United Arab Emirates were prominent transshipment points.
Balancing Ties with Russia and the West
India’s involvement in these exports presents a diplomatic challenge for Western policymakers. The U.S. and European nations seek to build strong partnerships with Prime Minister Narendra Modi’s government while India continues to strengthen its ties with Russia. In addition to supplying restricted technologies, India has become one of the largest buyers of Russian oil, despite efforts by allies to curb such sales.
Rupee-Ruble Trade Boosting Exports
A key reason for the rise in Indian exports to Russia is the large reserve of Indian rupees Russia has accumulated through oil sales, according to officials. This has further fueled trade between the two countries.
Sanctions and Western Pressure on India
India’s role as a transshipment hub has caught the attention of U.S. and EU sanctions agencies. Officials from these countries have made several visits to India, urging local authorities to tighten control over shipments to Russia. Several Indian companies have already been targeted by Western sanctions.
In July, U.S. Deputy Treasury Secretary Wally Adeyemo wrote a letter to senior officials at the Confederation of Indian Industry. The letter warned Indian companies and banks of the potential sanctions risks if they continued doing business with Russia’s military-industrial base, according to a report by Bloomberg News.
