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Citing leaked Russian state correspondence and unnamed Western officials, the UK-based daily Financial Times reported Wednesday that Russia has been secretly acquiring sensitive goods in India and explored building facilities in the country to secure components for its war effort.
According to the FT report, Russia’s industry and trade ministry, which oversees defence production to support its invasion of Ukraine, drew up confidential plans in October 2022 to spend about Rs 82 billion ($1bn at the time) on securing critical electronics through channels hidden from Western governments.
According to the report, the plan was to use “significant reserves” of rupees amassed by Russian banks from booming oil sales to India. It saw India as an alternative market to source crucial goods “previously supplied from unfriendly countries”, it said. Russia and its Indian partners, the report claimed, targeted dual-use technologies — goods with both civilian and military applications — that are subject to Western export controls.
India has defended its purchase of Russian oil at discounted prices, and even pointed out the “hypocrisy” of the West given that Europe’s energy needs are still met by Russia via indirect routes.
In Kyiv last month, during Prime Minister Narendra Modi’s visit to Ukraine, External Affairs Minister S Jaishankar defended India’s energy trade with Russia. Responding to questions, he said it came up during the discussions with Ukrainian President Volodymyr Zelenskyy and it was explained to the Ukrainian side about the “tight energy market”.
“India is a big oil consumer. It’s a big oil importer because we don’t produce oil. So, it’s not like there is a political strategy to buy oil. There is an oil strategy to buy oil. There’s a market strategy to buy oil… The fact that the market is tight, that today big suppliers like Iran and Venezuela, who used to supply India, are constrained from operating freely in the markets… This factor needs to be taken into account,” Jaishankar said.
The FT report stated that “Moscow even envisaged pumping investment into Russo-Indian electronics development and production facilities” but added the disclaimer that the extent to which Moscow enacted its plan was unclear.
The report stated that Wally Adeyemo, the US deputy treasury secretary, wrote in July to three of India’s top business organisations warning them that “any foreign financial institution that does business with Russia’s military industrial base risks being sanctioned itself”. Adeyemo added: “This heightened sanctions risk exists regardless of the currency used in a transaction.”
On August 20, The Indian Express reported that US government officials were sensitising Indian companies and exporters to deter them from supplying Russia with items and technology that could end up being used in Russian missiles and other defence equipment.
Official data showed that India’s total exports to Russia in 2023 surged by 40 per cent to exceed $4 billion, largely driven by engineering goods, which nearly doubled to $1.32 billion in 2023 from $680 million in 2022.
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