NEW DELHI, India (Diya TV) — With Western sanctions mounting, Russia has reached out to India in pursuit of key components for its war effort through secret purchases of sensitive goods and an attempt to set up production on Indian soil. According to Russian state correspondence viewed by the Financial Times, Moscow’s plans underline a growing drive to tap into India’s market and find ways around Western export controls.
In October 2022, the Ministry of Industry and Trade, responsible for defense production, drafted secret plans to spend roughly INR 82 billion (about $1 billion at the time) securing critical electronics via circuitous routes that would be difficult for the West to track. The ministry aimed to tap into the “considerable reserves” of rupees that Russian banks had amassed from rising oil sales to India and listed India as a promising alternative for obtaining dual-use technologies — those with both civilian and military applications — that had previously been supplied by Western countries.
The correspondence shows that Russia even envisioned significant investments in India to build and produce electronics domestically, potentially bypassing Western export controls. The extent to which Moscow has enacted this plan remains unclear, but trade flow data suggests an intensified relationship between Russia and India, particularly in the categories of products highlighted in the leaked documents.
The outreach has not gone unnoticed in Washington, where India’s ties with Moscow have been a growing source of friction. “This heightened sanctions risk exists regardless of the currency used in a transaction,” U.S. Deputy Treasury Secretary Wally Adeyemo warned in July 2023.
Despite efforts to balance its diplomatic relations, India has continued to extend an economic lifeline to Russia following the invasion of Ukraine. India emerged as the largest buyer of Russian crude oil, pushing bilateral trade between the two countries to an all-time high of $66 billion in the 2023-24 financial year — five times more than the period before the invasion.
Evidence of Russia’s use of Indian backchannels is illustrated by leaked correspondence involving Alexander Gaponov, a deputy head of the radio-electronics division of the Russian Ministry of Industry and Trade, a critical area for Russian defense capabilities. Gaponov reached out to a shadowy Moscow-based organization known as the Consortium for Foreign Economic Activity and International Interstate Cooperation in Industry, which is known to have ties with Russian security services. The head of the consortium, Vadim Poida, responded with a detailed five-point plan on how Russia could spend its rupees and establish a reliable supply chain of dual-use components. He called for setting up a “closed payment system” between Russian and Indian companies to avoid Western scrutiny, using digital financial assets.
Poida’s consortium estimated that Russia could buy components worth up to RUB 100 billion, including parts for telecommunications, servers, and other complex electronic equipment that had previously been sourced from Western countries. The group also launched pilot projects to manufacture Russian-designed components in India and studied ways to conceal the involvement of Russian entities, as well as logistics options for funneling supplies through third countries.
Further evidence matching the alleged consortium activities appears in trade filings. Innovio Ventures, an Indian company, appears in trade declarations as a supplier of at least $4.9 million worth of electronic equipment, including drones, to Russia, with settlements in rupees. Some of those shipments were destined for companies like Testkomplekt, a Russian firm sanctioned by the U.S. and the European Union for its role in Moscow’s military procurement network.
While the success of Moscow’s broader strategy to use India as a backdoor for dual-use technologies remains uncertain, the move underscores Russia’s efforts to circumvent stringent Western sanctions. Meanwhile, India faces a delicate balancing act, trying to maintain its ties with Russia without jeopardizing its growing relationship with the United States.
