India has emerged as the second-largest supplier of restricted critical technologies after China to Russia. Microchips, circuits and machine tools still remain at the core of Russia’s military campaign in Ukraine. Exports from India have seen an escalation of these commodities, totaling $95 million in July 2024, rocketing since the past months.
US and European officials have expressed dismay as India becomes second-largest supplier of restricted critical technologiessecond-largest supplier of restricted critical technologies to Russia. They view it as one of the biggest challenges of restricting supplies to Russia’s military. India’s huge backlog of rupees garnered from selling oil to Russia has been a catalyst in making this shift.
India has emerged as the world’s largest transshipment country of critical technologies, and Western sanctions bodies have taken notice. The European Union and the US have called upon India time and again to exercise greater restraint in letting the shipment of such items. Several Indian companies have already fallen under Western sanctions for exporting restricted items to Russia.
India is now second-largest supplier of restricted critical technologies: How is it linked with the military?
In July 2024 US Deputy Treasury Secretary Wally Adeyemo threatened Indian companies and banks with sanction risks. He particularly made remarks regarding the dangers of dealing with Russia’s military-industrial base. The US and EU targeted their focus at technologies used in Russian weapons or necessary for the production thereof.
The surge in Indian exports makes it impossible to sever supplies to the Russian military. Its efforts to become a major buyer of Russian oil have placed it more firmly in Russia’s hands when Western pressure for curbs on the sale has been mounting. India and China, among others, have refused to bend to Western pressure to cut economic ties with Russia.
The US and EU attach extreme significance to India, where they hope to strike a balance between sanction efforts with good relations maintained with India. India has become a critical transshipment point, along with Turkey, the UAE, Malaysia, and Thailand. Western policymakers today face enormous challenges in blocking these routes as they work incredibly hard to make bilateral partnerships stronger under Narendra Modi’s government.
India denies commenting on this development
At a time when Russia is increasingly becoming isolated from the West, ramp-ups in Indian exports have drawn attention to the country’s role in these exports. India’s Ministry of External Affairs did not want to comment on these developments. Ukraine’s partners have lamented New Delhi’s inaction to diplomatic overtures over the issue.
This is amid rising Russian demand in technologies that enable it to sustain its war efforts. On its part, India’s position in the supply chain has drawn attention from the US and EU sanctions agencies, even during repeated diplomatic engagements. Indian companies have been trading with Russia with the knowledge of warnings and the possibility of facing Western sanctions.
The mounting pressure on India to reduce these consignments has not affected the policies till now. For its part, the west has targeted the firms and individuals responsible for moving contraband supplies to Russia. The growth of Indian exports reflects the country’s economic ties with Russia and a hike in the requirement of technological adaptation in view of international sanctions.
Indian exports rising surely point out the problems the US and the EU face in the context of maintaining global sanctions regimes. However, the concern is obviously the geoeconomic aspect – balance between growth in relations with Russia and good relations with the West.
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