As per a report published in the Financial Times on Wednesday, Russia established a clandestine trade channel with India to obtain crucial electronics essential for its military operations in Ukraine.
This development coincides with the fact that New Delhi and Washington are increasingly becoming tense due to India’s connections with Moscow.
The Russian state communication that the Financial Times claimed to have obtained also reveals that the commerce conduit, which is used to get critical commodities, has remained concealed from western countries.
The article also stated that in October 2022, the industry and commerce ministry of Russia put up secret plans to spend around 82 billion Indian rupees ($1 billion at the time) on purchasing essential gadgets through the covert channel.
It should be mentioned that the ministry is in charge of defense manufacture to aid Moscow’s full-scale invasion of the Ukrainian territory.
The article went on to say that Moscow viewed New Delhi as a substitute market for obtaining essential items that were “previously supplied from unfriendly countries,” and that the objective was to use the rupee reserves that Russain banks had accumulated from its oil sales to India.
Both sides were focusing on dual-use technology, which are subject to export restrictions from the West but have potential for both military and civilian use.
According to the reports, Alexander Gaponov, the deputy head of the ministry’s “radio-electronics” division, asked the Consortium for Foreign Economic Activity and International Interstate Cooperation in Industry, an opaque organization based in Moscow with connections to the Russian security services, to submit plans for obtaining essential components from India. This correspondence was leaked.
Consortium president Vadim Poida responded by saying that the company has worked with the Russian electronics sector and representatives of pertinent Indian state and private companies to build some concrete plans to use the rupees from the Kremlin.
Based to the article, Poida devised a five-phase strategy to assist Russia in establishing a supply of dual-use components by utilizing its rupees through a closed payment system that would remain outside of the purview of western nations and involve Russian and Indian enterprises.
According to consortium estimates mentioned in the report, which highlighted that the consortium’s legal entity had set up in 2013 and that Poida had taken over and renamed it in March of 2022, just a month after Russia invaded Ukraine, Russia could purchase up to Rbs100 billion of components, including parts for servers, telecommunication, and other critical electric equipment.
The article also included information from Customs records, mentioning that Innovio Ventures, an Indian business, was named in trade declarations as a supplier of drones and other electronic equipment worth at least $4.9 million to Russia, as well as $600,000 worth of items delivered to Kyrgyzstan.
The report states that the transactions were recorded in Russian files as paid in Indian rupees.
A $568,000 worth of electronic equipment for use in radio-electronic systems was shipped to Testkomplekt, a Russian business under sanctions from the US and the EU, as part of the exports to Russia.
The US deputy Treasury Secretary Wally Adeyemo wrote to three of India’s leading business organizations in July, cautioning them that “any foreign bank that does business with Russia’s military industrial base could be sanctioned itself.” This information was also included in the FT story.
