India-Russia Relations

This seems like an attempt to build public pressure on New Delhi. Both EU & US have already sanctioned many of these electronics manufacturers already.
thats the idea.

when some one calls trade between two sovereign cntries as covert.... you know rest of the stuff will have more unsubstantiated masala. This more or less looks like a preparation for a hit job on incoming investments in semi-conductor industry.
I hope we can offer better value than Moscow to India on defence or energy: US Deputy NSA
this is the same guy who came to India & threatened with will have "consequences" stmt.
 
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From May 2024:

Russian firms ramp up spending from rupee accounts on defence equipment, arms

By Rhik Kundu
09 May 2024, 11:26 AM IST
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According to recent data from the commerce ministry, exports to Russia in 2023 stood at $4.06 billion, while imports totaled $60.60 billion.

NEW DELHI: Russian companies have spent nearly $4 billion from their funds lying in rupee vostro accounts in India to buy locally made arms, among other purchases, over the past 6-8 months, according to two people aware of the matter.
Russia, under western sanctions because of its invasion of Ukraine, was among 22 countries whose banks were allowed to open special vostro accounts with lenders in India to conduct trade in the local currency. Rupee deposits in the Russian vostro account burgeoned as India bought increasing amounts of cheap Russian crude oil.

Russian firms, however, did not see enough opportunities to invest the money held in their vostro accounts in India, as well as because of continued volatility in exchange rates. Mint reported in October that Russian exporters were stuck with about $8 billion in their rupee vostro accounts.

Since then, though, Russian firms have been buying Indian securities, machinery and arms, according to the people mentioned above.

“During the last 6–8 months or so, a large part of the amount has been utilized," this person said, adding, however, that it was difficult to specify the exact amount remaining in the vostro accounts because of some complex transactions.

Spokespersons of India’s commerce ministry and the Russian embassy didn’t respond to Mint’s emailed queries.

A vostro account is managed by a domestic bank on behalf of a foreign bank. The foreign lender can use the account for transactions, including forex settlements, cross-border payments, and investments in the domestic market.

Investments from Vostro

Russian funds (in rupees) have also been invested in Indian government treasury bills since regulations do not allow such funds to be invested in corporate debt.

By the end of March 2023, Russian investments in these securities were estimated to be $10–12 billion, mostly on account of Indian purchases.

“Both New Delhi and Moscow have been working on sorting the issue (piling up of the Indian currency payment in vostro account)," said the second person mentioned earlier. “Indian exports are also being settled from the Russian funds from the vostro account."

Russia continued to remain the largest supplier of crude oil to India in February with $3.61 billion worth of supplies. India imported crude oil worth $4.47 billion from Russia in January.

India exports machinery, auto parts, and other engineering goods to Russia, a significant part of which are settled in rupee.

Constrained trade

Russian banks’ exclusion from the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment system following western sanctions made its interbank payment transactions difficult, with limited access to a large part of the international markets.

To overcome this, India and Russia put in place the rupee payment system.

Russia has also signed local currency trade deals with Iran and China following the sanctions on Moscow after its invasion of Ukraine in 2022.
According to recent data from the commerce ministry, Indian exports to Russia in 2023 stood at a mere $4.06 billion, while imports totalled $60.60 billion.

https://www.livemint.com/economy/ru...ding-from-vostro-accounts-11715172054418.html

September 2024:

Russian funds in Indian rupee vostro accounts halve in the past 12-15 months as Russia invests, makes purchases

A large portion of the money of the Russian companies lying in the Rupee Vostro accounts in India has been utilized in investments and payments

By Rhik Kundu
5 Sep 2024, 06:00 AM IST

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Close to $3-3.5 billion of Russian companies’ money is lying in rupee vostro accounts in India.

New Delhi: Funds of Russian companies parked in Rupee Vostro accounts in India have nearly halved in the last 12-15 months, with a significant portion being used to buy Indian securities, machinery and defence products, two people aware of the matter said.

Much of the money has been utilized in investments and payments during the last and ongoing fiscal, with the amount currently lying in the accounts around $3-3.5 billion, from a high of $8 billion a year ago, the people mentioned above said.

The Vostro accounts were opened due to a lack of investment opportunities in India-Russia trade, continued volatility in exchange rates and challenges with fund repatriation following western sanctions over Russia's invasion of Ukraine in February 2022.

While the volatility in exchange rates and challenges with fund repatriation continue, a significant portion of the funds has now been used in purchasing Indian securities, machinery and defence products as Russian companies continue to look at newer avenues of investments, the first person mentioned above said.

"As things stand, Russian funds (in rupees) have also been invested in Indian government treasury bills since regulations do not allow such funds to be invested in corporate debt. However, it was difficult to specify the exact amount remaining in the Vostro accounts because of some complex transactions," the first person said.

Not a major issue

"The issues regarding the repatriation of money (from Russian exports) is not a major one anymore. They are now investing more in the Indian market due to the easing of regulations and are increasingly looking for new investment opportunities," the second person mentioned above added.

A Vostro account is managed by a domestic bank on behalf of a foreign bank. The foreign lender can use the account for transactions, including forex settlements, cross-border payments, and investments in the domestic market.

India's trade deficit with Russia stood at $57.17 billion in FY24, with exports at $4.26 billion and imports at $61.43 billion, higher than the $46.07 billion trade deficit reported in FY23 when exports stood at $3.15 billion and imports at $46.21 billion.

According to the Commerce Ministry data, India's trade deficit with Russia stood at $17.06 billion during April-June 2024 (Q1FY25), with exports at $1.31 billion and imports at $18.36 billion.

Much of the skew in the trade deficit comes from increasing Indian purchases of Russian oil, offered at a discount following western sanctions. India overtook China as the world's biggest importer of Russian oil in July.

“With Western sanctions limiting Russia's ability to receive payments in dollars, it is exploring alternatives like investing in Indian securities or purchasing goods and services from India. Russia may choose to buy agriculture or industrial goods or bullion from India,” said Ajay Srivastava, who heads the economic thinktank Global Trade Research Initiative (GTRI).

“However, India’s limited advanced electronics manufacturing capabilities make it unlikely that Russia can source cutting-edge technology from India,” he added.

Oil imports soften

Meanwhile, oil imports from Russia softened during August due to lower demand.

According to Reuters, Russian crude made up a record 44% of India's overall imports in July, rising to a record 2.07 million barrels per day (bpd), 4.2% higher than in June and 12% more than a year ago.

However, sequentially, these imports were down—to 1.73 million bpd in August from 1.94 million in July.

The Reserve Bank of India approved 34 applications in 2023 of different Russian banks for opening rupee accounts with Indian banks to facilitate two-way trade in the backdrop of Western sanctions.

The rupee accounts have been opened by Russian banks in 14 Indian commercial banks, including UCO Bank, State Bank of India, HDFC Bank, Yes Bank, IDBI Bank, Punjab National Bank, Axis Bank and Canara Bank.

Spokespersons of the commerce ministry and the Russian Embassy (New Delhi) didn't respond to emailed queries.

https://www.livemint.com/news/india/russian-funds-indian-rupee-vostro-accounts-11725445189898.html

They have another 3-3.5 billion left in those Vostro accounts. At this rate by the end of this year the Russians would have used up around 5-6 billion. That's about the limit of how much trade that can be kept completely away from western sanctions as of now.
 
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Ammunition from India enters Ukraine, raising Russian ire​



NEW DELHI, Sept 19 (Reuters) - Artillery shells sold by Indian arms makers have been diverted by European customers to Ukraine and New Delhi has not intervened to stop the trade despite protests from Moscow, according to eleven Indian and European government and defence industry officials, as well as a Reuters analysis of commercially available customs data.

The transfer of munitions to support Ukraine's defence against Russia has occurred for more than a year, according to the sources and the customs data. Indian arms export regulations limit the use of weaponry to the declared purchaser, who risks future sales being terminated if unauthorised transfers occur.

The Kremlin has raised the issue on at least two occasions, including during a July meeting between Russian Foreign Minister Sergei Lavrov and his Indian counterpart, three Indian officials said.
Details of the ammunition transfers are reported by Reuters for the first time.
The foreign and defence ministries of Russia and India did not respond to questions. In January, Indian foreign ministry spokesperson Randhir Jaiswal told a news conference that India had not sent or sold artillery shells to Ukraine.

Two Indian government and two defence industry sources told Reuters that Delhi produced only a very small amount of the ammunition being used by Ukraine, with one official estimating that it was under 1% of the total arms imported by Kyiv since the war. The news agency couldn't determine if the munitions were resold or donated to Kyiv by the European customers.
Among the European countries sending Indian munitions to Ukraine are Italy and the Czech Republic, which is leading an initiative to supply Kyiv with artillery shells from outside the European Union, according to a Spanish and a senior Indian official, as well as a former top executive at Yantra India, a state-owned company whose munitions are being used by Ukraine.

The Indian official said that Delhi was monitoring the situation. But, along with a defence industry executive with direct knowledge of the transfers, he said India had not taken any action to throttle the supply to Europe. Like most of the 20 people interviewed by Reuters, they spoke on condition of anonymity due to the sensitivity of the matter.
The Ukrainian, Italian, Spanish and Czech defence ministries did not respond to requests for comment.

Delhi and Washington, Ukraine's main security backer, have recently strengthened defence and diplomatic cooperation against the backdrop of a rising China, which both regard as their main rival.

India also has warm ties with Russia, its primary arms supplier for decades, and Prime Minister Narendra Modi has refused to join the Western-led sanctions regime against Moscow.
But Delhi, long the world's largest weapons importer, also sees the lengthy war in Europe as an opportunity to develop its nascent arms export sector, according to six Indian sources familiar with official thinking.

Ukraine, which is battling to contain a Russian offensive toward the eastern logistics hub of Pokrovsk, has a dire shortage of artillery ammunition.
The White House declined to comment and the U.S. State Department referred questions on Delhi's arms exports to the Indian government.
India exported just over $3 billion of arms between 2018 and 2023, according to data compiled by the Stockholm International Peace Research Institute think-tank.
Defence Minister Rajnath Singh said at an Aug. 30 conference that defence exports surpassed $2.5 billion in the last fiscal year and that Delhi wanted to increase that to about $6 billion by 2029.
Commercially available customs records show that in the two years before the February 2022 invasion, three major Indian ammunition makers - Yantra, Munitions India and Kalyani Strategic Systems - exported just $2.8 million in munitions components to Italy and the Czech Republic, as well as Spain and Slovenia, where defence contractors have invested heavily in supply chains for Ukraine.
Between February 2022 and July 2024, the figure had increased to $135.25 million, the data show, including completed munitions, which India began exporting to the four nations.
Arzan Tarapore, an India defence expert at Stanford University, said that Delhi's push to expand its arms exports was a major factor in the transfer of its arms to Ukraine.
"Probably in the sudden recent expansion, some instances of end-user violations have occurred."

DISCREET DELIVERIES​

Unlisted Italian defence contractor Meccanica per l'Elettronica e Servomeccanismi (MES) was among the companies sending Indian-made shells to Ukraine, said the former top Yantra official.
MES is Yantra's biggest foreign client. The executive said the Rome-based company buys empty shells from India and fills them with explosives.
Several Western firms had explosive filling capabilities but lack the manufacturing capacity to mass produce artillery shells, the executive said.
Yantra said in its 2022-23 annual report that it had agreed a deal with an unnamed Italian client to set up a manufacturing line for L15A1 shells, which the former Yantra executive identified as MES.
MES and Yantra India did not respond to emails seeking comment.
Customs data indicate that Yantra shipped $35 million worth of empty 155mm L15A1 shells to MES between February 2022 and July 2024.
Customs records also show that in February 2024, U.K.-based arms company Dince Hill - whose board includes a top MES executive - exported $6.7 million in ammunition from Italy to Ukraine.
Among the exports were 155mm L15A1 shells, which the customs declaration said were manufactured by MES for Ukraine's Defence Ministry and supplied for "promoting the defense capability and mobilization readiness of Ukraine."
Dince Hill did not respond to an email seeking comment. Its new owner, Rome-based Effequattro Consulting, could not be reached.
In another instance, Spain's Transport Minister Oscar Puente shared on social media, opens new tab in May an end user agreement signed by a Czech defence official that authorised the transfer of 120mm and 125mm ammunition shells from Munitions India to arms dealer Czech Defence Systems.
Pro-Palestinian activists had alleged that the Borkum, a vessel carrying Indian-made arms which had stopped in a Spanish port, was carrying the weapons to Israel.
Spanish newspaper El Mundo reported in May the final destination was actually Ukraine. A Spanish official and another source familiar with the matter confirmed to Reuters that Kyiv was the end user. Munitions India and CDS did not respond to questions.
Customs records dated March 27 show Munitions India had shipped 10,000 rounds of 120mm and 125mm mortar shells, worth more than $9 million, from Chennai to CDS.

FRIENDLY FIRE​

Russia, which supplies more than 60% of Delhi's arms imports, is a valued partner for India. In July, Modi chose Moscow for his first bilateral international trip since being elected to a third term.
At another meeting that month in Kazakhstan between top Indian diplomat Subrahmanyam Jaishankar and Lavrov, the Russian minister pressed his counterpart about Indian munitions being used by Ukrainians and complained that some were made by state-owned Indian companies, according to an Indian official with direct knowledge of the encounter.
The official did not share Jaishankar's response.
Walter Ladwig, a South Asia security expert at King's College London, said the diversion of a relatively small amount of ammunition was geopolitically useful for Delhi.
"It allows India to show partners in the West that it is not 'on Russia's side' in the Russia-Ukraine conflict," he said, adding that Moscow held little leverage over Delhi's decisions.
 
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India is now Russia’s no. 2 supplier of restricted technology

  • Microchips, circuits, machine tools power Putin’s war
  • Officials say raising the issue has brought little response

Bloomberg
By Viktoria Dendrinou and Alberto Nardelli
October 12, 2024, at 2:11 AM GMT+5:30
Updated on October 12, 2024, at 6:53 AM GMT+5:30
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In this pool photograph distributed by the Russian state agency Sputnik, Vladimir Putin and Narendra Modi shake hands during an informal meeting at the Novo-Ogaryovo state residence, outside Moscow, on July 8. Photographer: Sergei Bobylyov/Sputnik/AFP/Getty Images

India has surged to become the second-biggest supplier of restricted critical technologies to Russia, US and European officials said, highlighting the challenge in efforts to choke off exports fueling President Vladimir Putin’s war machine.

Indian exports of restricted items such as microchips, circuits and machine tools surpassed $60 million in both April and May, about double from earlier months this year, and leaped to $95 million in July, according to the officials, who asked not to be identified discussing private assessments. India is exceeded only by China.

Even more frustrating to Ukraine’s allies, some of them said, is that envoys who raise the issue have received little response from their Indian counterparts. India’s Ministry of External Affairs declined to comment when asked about the trend.

The most recent data means almost a fifth of the sensitive technology that goes into Russia’s military-industrial complex got there via India, the officials said.

The fresh data underscores the difficulty the US and its allies have faced in crimping Russia’s ability to fight in Ukraine two and a half years since Putin’s forces invaded. Exports of most such dual-use items directly to Russia are banned, so the country has taken to buying them from third countries — sometimes from unwitting subsidiaries of western firms or networks of intermediaries.

A State Department spokesperson said Friday that the department would reiterate rising concerns with Indian government officials as well as companies.

The US and European Union have focused most of their efforts on a list of technologies found in Russian weapons or are needed to build them.

As allies work to curb some of these routes — Turkey and the United Arab Emirates have been two big transshipment points — new hubs have emerged. They include India, Malaysia and Thailand, according to the people.

India’s role in the shipment of such goods has presented a further challenge because US and EU policymakers want to nurture partnerships with Prime Minister Narendra Modi’s government even as he cultivates ties with Putin. India has also emerged as a top buyer of Russian oil despite allied efforts to restrict sales.

A key driver of the shift is the vast stock of rupees Russia has accumulated from such oil sales, according to the officials.

India’s role as a transshipment point has made it a focus for European Union and US sanctions agencies in recent months. Officials from those nations have visited several times in efforts to get authorities to crack down on shipments, and several Indian firms have come under western sanctions.

In July, US Deputy Treasury Secretary Wally Adeyemo wrote a letter to senior officials at the Confederation of Indian Industry warning of the sanctions risks faced by Indian companies and banks that do business with Russia’s military industrial base, according to a copy of the letter obtained by Bloomberg News.

Bloomberg - Are you a robot?
 
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Russia Picks India Over China for Building Its Non-Nuclear Icebreaker Ships

By MI News Network
October 12, 2024
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Image for representation purposes only.

Russia chose India instead of China to construct non-nuclear icebreakers as Moscow strives to develop the Northern Sea Route and overcome the difficulties posed by Western sanctions. This will bolster India-Russia ties and position India as a major actor in the affairs of the Arctic region.

Indian Government is in talks with two shipbuilders, a state-owned and another private to build 4 non-nuclear icebreaker ships valued at more than $750 million.

This construction program will support Russian Nuclear energy company ROSATOM, while it searches for shipyards in India.

In 2023, Russia discussed India’s proposal for joint production of non-nuclear icebreakers in India, per Russian Minister Alexey Chekunkov. This news came after Russian discussions with an Indian business delegation which attended the Eastern Economic Forum in Vladivostok.

Both nations decided to enhance cooperation in the Russian Arctic and develop the Northern Sea Route as an important transit centre.

Russia sees the Northern Sea Route as an alternative route which will decrease sailing times and reduce costs. Compared to the Suez Canal route, it offers faster transit between North Europe and East Asia. By 2030, Russia plans to ship 150 million tonnes of crude oil, coal, LNG etc. through this route.

It involves deploying more than 50 icebreakers and ice-class ships and constructing new ports, terminals and emergency response ships which will ply this route.

Indian PM Narendra Modi met Russian President Vladimir Putin in July 2024 during his 2-day visit to Moscow where the two leaders discussed collaborating across sectors, including shipbuilding.

This will be achieved by establishing a joint working body within the IRIGC-TEC.

ROSATOM and Indian partners also discussed ways to develop the potential of the Northern Sea Route that extends from Murmansk close to the Russian border with Norway, to the Bering Strait close to Alaska.

ROSATOM wants to build 4 non-nuclear icebreakers in India and the order is being finalized. An official stated that both countries also plan on an MOU for shipbuilding and repairs of Russian ships in Indian shipyards along with training of Indian Seafarers in polar waters.

For this purpose, the Russian Direct Investment Fund (RDIF) and India’s Enso Group have partnered for joint investments of around $225 million for developing shipbuilding infrastructure.

Another reason why Russia chose India is because European shipyards cannot cater to the order while Chinese, Korean and Japanese shipyards are completely booked till 2028. Russia also sees India as a trustworthy partner with which it has always shared amicable relations.

Russian delegation and ROSATOM officials reached Indian Shipyards to assess their infrastructure and capacity. The only concern is the type of steel needed for construction and sourcing the engines for the vessels.

This project is a major milestone in Russia-India relations which will not only strengthen India’s position in shipbuilding. Meanwhile, Russia is also advancing its initiatives regarding arctic routes with China.

The Arctic Express Route was launched in July 2024, a Russian-Chinese effort to establish the shortest maritime link from the Pacific Ocean to the Atlantic through the Arctic.

China will benefit from developing and securing Russia’s Northern Sea Route since it is an integral part of its Belt and Road Initiative.

Russia is trying to maintain a balanced relationship with both China and India in the Arctic as it is part of Moscow’s broader strategy to turn to friendly countries to handle Western sanctions related to the conflict in Ukraine.

Russia Picks India Over China For Building Its Non-Nuclear Icebreaker Ships
 
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India's Russian oil imports rise 11.7% in Sept from Aug, data shows

By Nidhi Verma
October 16, 2024; 1:05 PM
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A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo Purchase Licensing Rights

NEW DELHI, Oct 16 (Reuters)- India's crude oil imports from Russia rose by 11.7% to about 1.9 million barrels per day (bpd) in September, accounting for about two-fifths of the South Asian nation's overall crude imports in the month, tanker data obtained from industry sources showed.

Overall, refiners in India imported a total of 4.7 million bpd of crude oil in September, marginally higher than in August and about 8.5% more than the same month a year ago, the data showed.

The refiners have invested billions of dollars in plant upgrades, allowing them to process more crude grades, in an effort to reduce costs.
India, the world's third largest oil importer and consumer, has emerged as the top buyer of discounted Russian seaborne oil after Western nations stopped buying from Moscow following its invasion of Ukraine.

Crude from the Commonwealth of Independent States, comprising Russia, Kazakhstan and Azerbaijan, accounted for about 43% of India's overall imports, up from 38.5% in August, the data showed.

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India's oil imports from various regions

During April-September, the first six months of the fiscal year to March 2025, India's imports of Russian oil rose 9.1% to 1.91 million bpd, the data showed.

Russia remained India's top oil supplier in September, followed by Iraq and Saudi Arabia. Russian oil imports were more than double Iraq's 867,600 bpd, the data showed.

India also resumed its imports of Venezuelan oil in September after a gap of two months, with private refiner Reliance Industries Ltd, opens new tab receiving a cargo, the data showed.

The market share accounted for by producers from the Organization of the Petroleum Exporting Countries (OPEC), mainly from the Middle East and Africa, declined marginally between April and September from the same period a year ago, a Reuters analysis of the data showed.

Imports from the Middle East fell to about a 41.6% share in April-September from 43.8% a year earlier, the data showed. Indian refiners mostly buy Middle Eastern oil under annual contracts with producers in the region.

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India's oil imports from various regions

https://www.reuters.com/business/en...orts-rise-117-sept-aug-data-shows-2024-10-16/
 
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Inside Shreya Life Sciences — the Indian drugmaker accused of supplying Russia with Nvidia AI chips

By Pihu Yadav
October 28, 2024, 12:35:25 PM IST (Updated)

Trade-tracking data show that the Indian firm is selling top-end Dell servers optimized for artificial intelligence to Russia.
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AI Servers with Nvidia or AMD chips are finding their way into Russia. Photographer: I-Hwa Cheng/Bloomberg

Mumbai-based Shreya Life Sciences, known for pharmaceuticals, is reportedly exporting Nvidia AI chips to Russia despite Western sanctions. Trade records reveal Shreya’s role in rerouting Dell servers with Nvidia processors, spotlighting India’s intermediary role in Russia's high-tech imports amid tightening restrictions.

In a discreet office building in Mumbai’s Andheri district, Shreya Life Sciences, a mid-sized pharmaceutical company, has emerged as an unexpected player in Russia's access to high-tech equipment amid US and European Union sanctions.

According to a Bloomberg investigation, Shreya Life Sciences has become a significant intermediary in the supply of Nvidia chips to Russia, raising concerns among Western nations about India’s growing role in facilitating Moscow's access to dual-use technology.

Analysing data from ImportGenius and NBD, Bloomberg News found that Shreya exported over 1,000 Dell PowerEdge XE9680 servers — each equipped with Nvidia’s H100 processors optimized for artificial intelligence — between April and August 2024.

These advanced servers, valued at approximately $300 million, were shipped to Russian trading firms Main Chain Ltd. and IS LLC, despite being on Western export restriction lists due to their potential military applications.

Founded in 1995 by CEO Sujit Kumar Singh to distribute pharmaceuticals in post-Soviet Russia, Shreya's shift towards technology exports represents a notable diversification from its core business. The company has capitalized on the demand for restricted products as traditional suppliers have retreated following Russia’s invasion of Ukraine in 2022.

A key aspect of Shreya’s recent operations involves Malaysia, which has become the source for much of the technology being re-exported to Russia. Trade records reveal that Shreya imported 1,407 Dell servers from Malaysia between March and August 2024, subsequently rerouting them to Russia.

While trading with Russia is not illegal for Indian companies — given India’s non-participation in US or EU sanctions — Shreya's transactions have attracted scrutiny from Western authorities. Visits by US and EU officials to India highlight the urgency of closing loopholes that allow sanctioned technology to reach Russia.

In a notable warning this summer, US Deputy Treasury Secretary Wally Adeyemo cautioned Indian business leaders about the potential for sanctions on entities that support Russia's military sector.

The Indian government, which has historically relied on Russian military hardware and increased oil imports from Moscow, has addressed these concerns selectively. According to Bloomberg, Indian authorities have investigated local companies supplying dual-use technologies but concluded that the matter is resolved; Shreya Life Sciences has reportedly not been placed on any flagged lists.

As Shreya expands its footprint in the technology trade, its financial ties with Russian state entities further underscore its dependence on Russia. The company’s main creditor, Promsvyazbank — a state-owned bank in Moscow — has consistently deferred Shreya’s loan repayments.

Promsvyazbank’s ties to Russia’s defence industry have led to sanctions on its leadership, including Peter Fradkov, the son of a former chief of Russia’s Foreign Intelligence Service.

Shreya's complex history, marked by near-bankruptcy in 2015 due to previous sanctions and ruble devaluation, coupled with questions about the quality of its pharmaceutical products, raises additional scrutiny as it ventures into high-stakes international trade.

The company began exporting computer hardware in September 2022, initially engaging with entities that later appeared on US sanctions lists. After severing those ties, Shreya pivoted to exporting to Main Chain, which is currently not under sanctions.

Inside Shreya Life Sciences — the Indian drugmaker accused of supplying Russia with Nvidia AI chips - CNBC TV18
 
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India’s Hindustan Aeronautics and BrahMos Aerospace Directly Supplying Military Components to Russia’s Sukhoi Design Bureau

October 29, 2024
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Thales manufactured the cockpit displays and avionics for Su-30SM and Su-30MKI.

Citing concerns about sanctions circumvention, France has called on India to stop the export of Thales-made Su-30 avionics to Russia through Kazakhstan.

France asked India to strengthen its export restrictions on avionics components used in Su-30s

In response to concerns that these critical supplies might be indirectly given to Russia in order to get around the international sanctions, France has formally asked India to strengthen its export restrictions on avionics components used in Su-30 fighter jets, Defense.IN reported.

India supplied Sukhoi Su-30s spare parts and avionics to Russia

Reports that a Kazakhstan-based firm is assisting with the maintenance and repair of Russian Su-30SM fighter jets using French-made technology—possibly imported from India—have raised concerns.

France is concerned that Russia, currently under international sanctions due to its war of aggression against Ukraine, could exploit this access to crucial parts for indirect supply to maintain the combat capabilities of its warplanes.

Kazakh company ARC Group is exploiting French technology to service Russian Su-30s.

According to an investigation by the intelligence community InformNapalm, the Kazakh company ARC Group is exploiting French technology to service Russian Su-30SMs, leveraging a cunning scheme to circumvent sanctions. Paris has expressed concerns, prompting India to monitor and restrict the movement of these sensitive components.

This investigation has uncovered a sophisticated scheme of Russian sanctions evasion. It has revealed how Russian military aircraft, particularly Su-30SM fighters, continue to be serviced using French avionics from companies like Thales and Safran.


At the heart of this scheme is the partnership between Kazakhstan’s ARC Group and Russia’s Rosaviaspetskomplekt. Despite the sanctions explicitly prohibiting such transactions, the investigation details how Kazakhstan became a key conduit for maintaining Russian Su-30SM fighter jets, which rely on sophisticated French avionics, including the SMD55S and SMD66S multifunctional displays, TLS2020 landing system, and SIGMA 95NAA navigation system, among others.

These systems are integral to the aircraft’s operation, making their maintenance critical for Russian military operations, including bombardments of cities and military positions in Ukraine. Documents acquired by InformNapalm through multiple sources, including a whistleblower from Kazakhstan, outline the methods used to bypass these restrictions.

The Su-30SM, a variation of the Su-30MKI operated by the Indian Air Force (IAF), depends strongly on avionics systems made by the French company Thales. These systems, which are essential to the aircraft’s operating efficiency, include heads-up displays (HUDs), navigation systems, and multipurpose displays.

India has accumulated considerable competence in maintaining and delivering spare parts for Su-30MKI aircraft, including the French-made avionics, as it operates the largest fleet of these aircraft worldwide. Indian companies are now major vendors in the worldwide Su-30 supply chain thanks to this experience.

This investigation underscores the complicated nature of international defense commerce and the difficulties in implementing sanctions in a global environment, even if India has not yet formally replied to the French request, according to the Indian newspaper.

India is in a unique position to affect the flow of these sensitive aviation technologies because it is a significant operator and supplier of Su-30 components.

Indian defense companies participating in the Su-30 supply chain are probably going to come under more scrutiny as a result of the French request. It is unclear how India would manage the difficulties of sanctions on Russia while attempting to maintain positive relations with both the West and Russia.

Brahmos Aerospace supplies microchips.

The United States on Wednesday dramatically broadened sanctions on Russia, including by targeting China-based companies selling semiconductors to Moscow, as part of an effort to undercut the Russian military machine waging war on Ukraine.

Indian Brahmos Aerospace supplied Russia with semiconductors and microchips used to produce anti-ship and cruise missile seeker in India and Russia. Indian Brahmos is not on the list of sanctioned companies. The Brahmos-supplied semiconductors were used to produce seekers in India, and later, the company supplied the same seekers to Russia for manufacturing the Kalibr cruise missile and Kh-31 anti-ship missiles.

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Among the steps, the U.S. Treasury said it was raising “the risk of secondary sanctions for foreign financial institutions that deal with Russia’s war economy,” effectively threatening them with losing access to the U.S. financial system.

It also said it was moving to restrict the Russian military industrial base’s ability to exploit certain U.S. software and information technology services and, with the State Department, targeting more than 300 individuals and entities in Russia and beyond, including in Asia, Europe and Africa.

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Separately, the Commerce Department said it was targeting shell companies in Hong Kong for diverting semiconductors to Russia, taking steps that would affect nearly $100 million of high-priority items for Moscow including such chips.

A senior Commerce official told reporters on condition of anonymity that Russia will also expand its list of items it cannot import from other nations to include not just U.S.-origin products but also U.S.-branded goods, meaning those made with U.S. intellectual property or technology.

WIDELY USED TECHNOLOGY

U.S.-made chips and other technology have been found in a wide array of Russian equipment, from drones to radios, missiles and armored vehicles, recovered from the battlefield, Ukrainian officials say.

After seizing Crimea from Ukraine in 2014, Russia launched a full-scale invasion of its neighbor in 2022, triggering a host of new U.S. economic sanctions on Moscow.

While many analysts do not expect U.S. and other nations’ sanctions to materially change Russian President Vladimir Putin’s calculus, they believe they will both make it harder for Moscow to wage war and, over time, weaken Russia’s economy.

“Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries,” Treasury Secretary Janet Yellen said in a statement.

The Treasury also said it was imposing sanctions on key parts of Russia’s financial infrastructure, including the Moscow Exchange (MOEX), which operates Russia’s largest public markets for equity, fixed income, foreign exchange and other products.

MOEX and its related subsidiaries have facilitated sanctions evasion by obscuring the identities of parties engaged in such transactions, a senior Treasury official told reporters. By sanctioning them, the official said, the U.S. would force greater transparency on cross-border transactions, making it harder to evade sanctions.

MOEX, in a statement rushed out within an hour of the U.S. moves on Wednesday, a public holiday in Russia, said the new sanctions had forced an immediate suspension of trading in dollars and euros on its leading financial marketplace.

VIOLATING SANCTIONS

Despite export controls and sanctions imposed after Moscow’s full-scale invasion of Ukraine last year, The Insider has learned that tens of millions of dollars worth of microchips produced by two U.S. technology giants, Texas Instruments and Analog Devices, were shipped to Russia in a nine-month period in 2022. These microchips are used in Russian missiles and satellite communications integral to the Kremlin’s war effort, not to mention its ongoing attacks on Ukrainian civilian infrastructure.

Between early March and late November 2022, third-party companies supplied Russia with American-manufactured electronics from all over the world. Not only via main clearinghouses in China and Hong Kong, which don’t have sanctions in place against Russia, but also through Western companies in countries that do. They include Germany, Lithuania, the Netherlands, Estonia, and Finland, all EU and NATO allies, which have provided extensive humanitarian and military aid to Ukraine.

According to Russian customs declarations, between March 1 and November 30, 2022, $89 million worth of Analog Devices-manufactured microchips and $50 million worth of Texas Instruments-manufactured ones were imported into Russia from foreign jurisdictions. Many of those microchips have military applications, according to Leonid Dmitriev, a Ukrainian military expert The Insider consulted…

Import data is readily accessible to anyone through Import Genius, a fee-for-service website that allows people to examine customs traffic in a host of countries. The data set The Insider examined represents just a small snapshot of what looks like extensive violations of U.S. and EU sanctions in the course of the 18-month conflict.

The scheme was pretty straightforward: a private company registered in a foreign country acquired the Texas Instruments or Analog Devices microchips and then resold them to a private Russian import company. The bills of lading clearly identified the nature of the wares being shipped to Russia. The imports were next logged by the Russian Federal Customs Service. From there, their final destination and end-users remain unknown.

India’s Hindustan Aeronautics And BrahMos Aerospace Directly Supplying Military Components To Russia’s Sukhoi Design Bureau
 
India Overtakes Saudi Arabia as Europe’s Top Refined Fuel Supplier

India has overtaken Saudi Arabia to become Europe’s largest supplier of refined fuels, with imports expected to exceed 360,000 barrels per day amid new sanctions on Russian oil.

By Satyam Singh
October 29, 2024, 4:54 am IST
1730216636096.png

India, a BRICS member, has emerged as Europe’s largest supplier of refined fuel, surpassing Saudi Arabia, according to data from trade intelligence firm Kpler. Europe’s refined oil imports from India are set to exceed 360,000 barrels per day in response to new Western sanctions on Russian oil, reshaping global energy trade routes.

Historically, Saudi Arabia has held a premium status in global oil supply, consistently ranking among the world’s top oil producers. However, with European nations seeking alternative sources due to sanctions on Russia, India has swiftly expanded its reach.

Reports from Reuters indicate that prior to the Russia-Ukraine conflict, Europe imported an average of 154,000 barrels of oil daily from Indian refiners. This figure increased to 200,000 barrels per day following the European Union’s February 5 ban on Russian oil. Kpler estimates that India’s Russian oil imports could reach over 2 million barrels per day by April next year, which would account for 44% of India’s total oil imports.

US Sanctions on Russia Open Doors for India

US-led sanctions on Russian oil have enabled India to secure Russian oil at discounted rates, saving the country nearly $7 billion between 2022 and 2024. By conducting transactions in local currencies rather than US dollars, India has also benefited from favorable exchange rates, enhancing its purchasing power.

While India has gained ground, Saudi Arabia is taking measures to strengthen its oil production capabilities. In December, OPEC+, led by Saudi Arabia, plans to add 180,000 barrels daily, with further production increases anticipated through 2025. This adjustment in output is designed to compensate for current production cuts and help the Kingdom regain its position in global markets.

Saudi Arabia’s Strategic Moves to Modernize and Expand

Amid these shifts, Saudi Arabia is investing in its shipping capabilities. The national shipping company Bahri signed a $1 billion agreement with Greece-based Capital Maritime and Trading Corporation (CMTC) to acquire nine advanced Very Large Crude Carriers (VLCCs). These modern carriers will upgrade Bahri’s fleet, enabling faster, more efficient oil transport and supporting Saudi Arabia’s plans to boost its export capacity.

India Overtakes Saudi Arabia As Europe's Top Refined Fuel Supplier
 
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India Overtakes Saudi Arabia as Europe’s Top Refined Fuel Supplier

India has overtaken Saudi Arabia to become Europe’s largest supplier of refined fuels, with imports expected to exceed 360,000 barrels per day amid new sanctions on Russian oil.

By Satyam Singh
October 29, 2024, 4:54 am IST
View attachment 37534
India, a BRICS member, has emerged as Europe’s largest supplier of refined fuel, surpassing Saudi Arabia, according to data from trade intelligence firm Kpler. Europe’s refined oil imports from India are set to exceed 360,000 barrels per day in response to new Western sanctions on Russian oil, reshaping global energy trade routes.

Historically, Saudi Arabia has held a premium status in global oil supply, consistently ranking among the world’s top oil producers. However, with European nations seeking alternative sources due to sanctions on Russia, India has swiftly expanded its reach.

Reports from Reuters indicate that prior to the Russia-Ukraine conflict, Europe imported an average of 154,000 barrels of oil daily from Indian refiners. This figure increased to 200,000 barrels per day following the European Union’s February 5 ban on Russian oil. Kpler estimates that India’s Russian oil imports could reach over 2 million barrels per day by April next year, which would account for 44% of India’s total oil imports.

US Sanctions on Russia Open Doors for India

US-led sanctions on Russian oil have enabled India to secure Russian oil at discounted rates, saving the country nearly $7 billion between 2022 and 2024. By conducting transactions in local currencies rather than US dollars, India has also benefited from favorable exchange rates, enhancing its purchasing power.

While India has gained ground, Saudi Arabia is taking measures to strengthen its oil production capabilities. In December, OPEC+, led by Saudi Arabia, plans to add 180,000 barrels daily, with further production increases anticipated through 2025. This adjustment in output is designed to compensate for current production cuts and help the Kingdom regain its position in global markets.

Saudi Arabia’s Strategic Moves to Modernize and Expand

Amid these shifts, Saudi Arabia is investing in its shipping capabilities. The national shipping company Bahri signed a $1 billion agreement with Greece-based Capital Maritime and Trading Corporation (CMTC) to acquire nine advanced Very Large Crude Carriers (VLCCs). These modern carriers will upgrade Bahri’s fleet, enabling faster, more efficient oil transport and supporting Saudi Arabia’s plans to boost its export capacity.

India Overtakes Saudi Arabia As Europe's Top Refined Fuel Supplier
this does not violate sanctions. Highest double standards award 👍
 
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The Indian companies also include Lokesh Machines Limited; Pointer Electronics; RRG Engineering Technologies Private Limited; Sharpline Automation Private Limited; Shaurya Aeronautics Private Limited; Shreegee Impex Private Limited; and Shreya Life Sciences Private Limited.

https://www.business-standard.com/e...-military-industrial-base-124110100762_1.html

Lokesh Machines Ltd. is an interesting entity. They make the ASMI SMG for the Army:
1730546885933.png


I believe LML supplied milling machines & fine boring machines to the Indo-Russia rifles company for making AK barrels. That's how the Russians got to know LML. It is likely that LML supplied such machines to Russia for their own production of AKs. Maybe that's why they got sanctioned.

These sanctions will have no effect as LML has no business or properties abroad. Russia is their 1st & till date only export customer. They say so themselves:

Most Indian firms say sanctions by US unlikely to have an impact

By Aditi Agrawal, New Delhi
Nov 02, 2024, 07:36 AM IST

Many of the 19 Indian companies that have been sanctioned by the US government for trading with Russian companies said that they were not really affected by the sanctions as they only dealt with Russia, and because the Indian government had not placed any restrictions on such commercial interactions.


The US government, on October 30, sanctioned nearly 400 entities and individuals, including 19 Indian companies, for “supporting Russia’s military industrial base”. Two individuals, who are the co-directors of one of the sanctioned companies, were also sanctioned. Due to these sanctions, all properties of these entities, within the US or in control of US will be blocked and will be reported to the Office of Foreign Assets Control (OFAC). Americans and all those within the US are prohibited from conducting any transactions with the sanctioned entities.

Ajeet Samani, the owner of Maharashtra-based Khushbu Honing, said that hardly 30% of his ₹15 crore turnover depended on Russia. “Rest of our business is domestic. We are not doing any business with the US, so we are not really affected. I am getting paid in INR, not in dollars or Euros,” he said. This might affect Khushbu Honing’s future imports from and exports to the US. “Tomorrow, if I have to import or export something to or from the US, I may have to do it using another company, like a sister company. However, there is no requirement for my machines in the US because there are many manufacturers in the US,” he said.

But he still intends to talk to the Engineering Export Promotion Council of India to get a better picture as everything is still in the initial phase. “US and Europe cannot supply to Russia so Russia is naturally looking to India and China,” he said.

Khushbu Honing has been sanctioned for sending at least give shipments of advanced machine tools and accessories to Russia-based Unimatik that has been sanctioned by the US for supplying Russian defence with CNC machines and related parts. “As of January 2024, U.S.-designated, Russia-based Limited Liability Company AK Microtech sought to evade sanctions by purchasing microelectronics equipment via Khushbu,” the US Treasury Department said in its statement.

Rahul Kumar Singh, the director of Delhi-based TSMD Global, which has been sanctioned for shipping CHPL items worth $430,000 (~ ₹3.6 crore) to Russia based companies including Elektron Komponent and sanctioned companies LLC VMK, Alfa LLC, and Joint Stock Company Avtovaz, said he did not understand why they had been sanctioned.

In FY24, Singh said that TSMD Global’s turnover was more than ₹10 crore. TSMD Global buys products from the open Indian market and exports them to Russia and all the company’s income comes from Russia. The transactions are processed through Russia’s Sberbank which has a branch in Delhi. He doesn’t know how the sanctions will affect the bottom line.

“We don’t know who is sanctioned and who is not. We purchase from the open Indian market and then export it. Some of these products might have originated in the US, in EU, in Japan, in China, in Malaysia, in Hong Kong, and even in India,” he said. “We can’t control where electronic components are then used,” he said. As per the State Department’s statement, TSMD Global had shipped US and EU origin CHPL items such as electronic integrated circuits, central processing units and other fixed capacitors between July 2023 and March 2024.

“We export electronic parts, garments, parts for automobiles. We have been doing this for so long. We, in fact, want to closely work with Russia. We work according to Modi ji. He repeatedly goes to Russia. We are getting business from there,” Singh said. “At times the customs department asks us when we export whether it is used for aviation. We tell them that the same component is used in planes and in mobiles,” he said.

On Friday, he did not know if the company would continue to work with the sanctioned Russian companies. “If we are getting business from there and our government’s relations with that country are okay, why shouldn’t we?”

But Singh is clear that if the Indian government imposes restrictions, TSMD Global will stop, but it has not thus far.

Praveen Tyagi, director of Meerut-based Shreegee Impex Private Limited, said that his company is not affected by the sanctions at all because his company, which has an annual turnover of about ₹70 crore, deals only with Russia. The Treasury Department said that Shreegee had listed a Russian company sanctioned by the US, Kamaz Publicly Traded Company, as one of its customers and said that it had sent “hundreds of high-priority dual-use items, including aviation-related parts, as well as transmission belts and rubber products for automobile assembly, to Russia-based manufacturers”. Tyagi said that his company supplied transmission belts and hoses to Russian companies but not aviation-related products, and that Kamaz was not his customer.

The owner of Bangalore-headquartered Emsystech, Thirumala Raja, too said that he was not affected as his company was only importing small electronic components from the US and there are not many dealings with American clients. “Whatever components we have bought from the US, they are meant for use in India only because of the geopolitical issues. We exported some microprocessor components and other components to Russia that we imported from Hong Kong in 2022 but they were related to medical electronics, nothing defence related,” he said. This company has an annual turnover of about ₹20 crore, as per Raja.

The Treasury Department said that Emsystech had sent over 800 shipments, including of electronic integrated circuits and tantalum capacitors, to Russia-based end-users such as U.S.-designated Basis Trade Prosoft LLC, a supplier of industrial computers, components for automated process control systems, and radio-electronic components. Raja said that this happened until 2022 and the exports were meant for medical electronics. He said that his company has no defence-linked clients overseas, and that his company supplied power solutions and small microcontrollers to the Indian Navy via Bharat Electronics Limited.

A Delhi-based company, Denvas Services Private Limited, has been sanctioned because three of its four directors are Russian nationals who, as per the Treasury Department, are involved in defence procurement schemes and the company itself has been used by Russia to procure US-origin microelectronics for use in its advanced conventional weapons as recently as 2023.

Another company, Mumbai-based Shreya Life Sciences Private Limited, has been sanctioned for shipping US trademarked technology worth tens of millions of dollars, including advanced servers designed for AI, to Russia which Russia, as per the Treasury Department, “seeks to procure for its weapons programs”. On October 28, Bloomberg reported that Shreya exported 1,111 units of Dell Technologies Inc.’s most-advanced servers to Russia in April-August 2024 and 998 of these servers contained high-end processors optimised for AI made by Nvidia. Corp. or Advanced Micro Devices Inc., according to Dell’s website. These shipments, as per Bloomberg, were worth $300 million and imported by two Russian trading companies, Mein Chain Ltd. and I.S LLC. Mein Chain was also sanctioned by the Treasury Department for being a Russia-based wholesaler and importer of computer equipment founded in 2023 that offers “turnkey import” services.

Of the 19 sanctioned companies, at least two --- Gujarat headquartered Galaxy Bearings Limited and Haryana headquartered Lokesh Machines --- are publicly listed companies. Lokesh Machines’ clients include American companies such as John Deere and Cummins, Sweden’s Volvo, and Japan’s Honda and Suzuki. HT has reached out to both companies with a detailed questionnaire.

One of the sanctioned companies is Hyderabad-based RRG Engineering whose chairperson and managing director GM Ganga Rao was an industry expert for the Ministry of Civil Aviation's 2018 task force on fast tracking unmanned aerial vehicle (UAV) technology headed by Jayant Sinha.

While sanctioning RRG Engineering, the US Treasury Department said that the company had sent over 100 shipments of microelectronics to a sanctioned, Russia-based company called Arteks since 2023.

Source: https://www.hindustantimes.com/indi...likely-to-have-an-impact-101730487873682.html

Unless New Delhi starts imposing restrictions, which is unlikely, these sanctions will have minimal impact.
 
https://www.business-standard.com/e...-military-industrial-base-124110100762_1.html

Lokesh Machines Ltd. is an interesting entity. They make the ASMI SMG for the Army:
View attachment 37682

I believe LML supplied milling machines & fine boring machines to the Indo-Russia rifles company for making AK barrels. That's how the Russians got to know LML. It is likely that LML supplied such machines to Russia for their own production of AKs. Maybe that's why they got sanctioned.

These sanctions will have no effect as LML has no business or properties abroad. Russia is their 1st & till date only export customer. They say so themselves:



Source: https://www.hindustantimes.com/indi...likely-to-have-an-impact-101730487873682.html

Unless New Delhi starts imposing restrictions, which is unlikely, these sanctions will have minimal impact.


LokeshMachines clarifies on rpts of their name appearing on the sanctions list of the US Department of Treasury:
1. In the process of reaching out to them to gather more info
2. Have been exporting machines to Russia since 2011
3. Our machines are being sourced by distributors who stock these or further sell
4. None of our distributors are featured on any sanctions list
5. Not aware of any machines being used or dealt with any sanctioned entities or individuals