India becomes second-largest supplier of restricted technology to Russia

India has emerged as the second-largest supplier of restricted critical technologies to Russia, according to US and European officials.

This development presents significant challenges in efforts to curb exports that support President Vladimir Putin's military activities in Ukraine.

Indian exports of restricted items, including microchips, circuits, and machine tools, exceeded $60 million in both April and May—approximately double the figures from earlier this year.

Exports surged to $95 million in July, making India second only to China in this regard.

Officials indicated that nearly one-fifth of the sensitive technology utilised in Russia's military-industrial complex originated from India.

However, frustrations have grown among Ukraine's allies, as diplomats raising concerns about this trend have reportedly received minimal response from Indian counterparts.

When approached for comment, India's Ministry of External Affairs declined to provide any information regarding the increasing exports.

The latest data underscores the challenges faced by the US and its allies in limiting Russia's military capabilities nearly two and a half years after its invasion of Ukraine.

Although exports of most dual-use items directly to Russia are banned, the country has turned to third nations for procurement—often through unsuspecting subsidiaries of Western firms or intermediary networks.

A spokesperson for the US State Department announced on Friday that concerns would be reiterated to Indian government officials and companies regarding these exports.

The US and European Union have concentrated their efforts on a list of technologies essential for Russian weaponry.

As allied nations work to mitigate these export routes—such as Turkey and the United Arab Emirates, which have served as major transshipment points—new hubs have surfaced, including India, Malaysia, and Thailand.

India's involvement as a transshipment point poses a complex challenge for US and EU policymakers, who seek to strengthen ties with Prime Minister Narendra Modi's administration, even as India continues to foster relationships with Russia.

Additionally, India has become a significant purchaser of Russian oil, counteracting allied attempts to restrict such sales.

Officials suggest that India's increasing involvement can be attributed to the substantial stockpile of rupees Russia has amassed from oil sales.

This role has led US and EU sanctions agencies to focus more closely on India in recent months, with officials from these nations visiting several times to persuade Indian authorities to curtail shipments.

Several Indian firms have already faced Western sanctions.

In July, US Deputy Treasury Secretary Wally Adeyemo warned senior officials at the Confederation of Indian Industry about the sanctions risks associated with doing business with Russia’s military-industrial sector, according to a copy of the letter obtained by Bloomberg News.