India has become the second-largest supplier of restricted critical technologies to Russia, according to U.S. and European officials. This development underscores the challenges faced by these nations in curbing exports that support President Vladimir Putin's war efforts in Ukraine.
In April and May, Indian exports of restricted items—such as microchips, circuits, and machine tools—surged to over $60 million, doubling previous monthly figures, and jumped to $95 million in July. Only China surpasses India in this regard.
Ukraine’s allies have expressed frustration, noting that discussions on this issue with Indian diplomats have often gone unanswered. When approached for comment, India’s Ministry of External Affairs declined to provide a response.
Current data indicates that nearly 20% of the sensitive technology used in Russia's military-industrial complex is sourced from India.
This information highlights the difficulties the U.S. and its allies have encountered in limiting Russia's military capabilities more than two and a half years after the invasion of Ukraine. While exports of dual-use items directly to Russia are banned, the country has turned to third nations—sometimes through unknowing subsidiaries of Western firms or intermediary networks—to obtain these technologies.
A State Department spokesperson indicated that rising concerns would be communicated to Indian officials and businesses. The U.S. and European Union have concentrated their efforts on technologies essential for Russian weaponry.
As allies attempt to curb these channels, new hubs have emerged, including India, Malaysia, and Thailand, joining established transshipment points like Turkey and the United Arab Emirates.
India's involvement as a supplier of such goods complicates the situation for U.S. and EU policymakers, who aim to strengthen partnerships with Prime Minister Narendra Modi's government, even as it continues to foster ties with Putin.
India has also become a major buyer of Russian oil, despite allied attempts to restrict these sales. A significant factor in this shift is the substantial stock of rupees that Russia has amassed from oil sales.
As a result of its role in transshipping these goods, India has drawn increased scrutiny from U.S. and European Union sanctions agencies in recent months. Officials from these regions have made multiple visits to India in an effort to persuade local authorities to clamp down on shipments, with several Indian firms facing Western sanctions.
In July, U.S. Deputy Treasury Secretary Wally Adeyemo sent a letter to senior officials at the Confederation of Indian Industry, warning of the sanctions risks that Indian companies and banks may encounter when engaging with Russia’s military-industrial sector, as indicated in a copy of the letter obtained by Bloomberg News.
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