Russia sets up covert trade route with India to buy critical electronics for its war in Ukraine: Report

Russia has built a secret trade route to obtain critical electronics from India for its war in Ukraine, a report by the Financial Times claimed on Sep 5.

These components, including parts for “telecommunication, server and other complex electronic equipment,” have both civilian and military applications, making them subject to Western export controls.

The report cited leaked government documents and anonymous sources and claimed that Russia has also considered establishing facilities there to support its war against Ukraine.

The Moscow-based Consortium for Foreign Economic Activity and International Interstate Cooperation in Industry (Ved MMKP) reported to Russia’s Industry and Trade Ministry in October 2022 that it could spend 82 billion rupees ($976,650) on components previously bought through Western countries, it said.

As Western nations have sanctioned cutting off Russia’s access to essential foreign-produced electronics, the country’s military relies on these components for missiles, drones and electronic warfare equipment.

According to the report, Moscow has planned to spend approximately ₹8,400 crore on securing critical electronics and dual-use technologies, bypassing Western export controls.

Russia's trade with India yielded $65 billion in 2023 and has helped it amass Indian rupees from booming oil sales amid sanctions.

While it is unclear how Russia executed its covert trade plan, customs filings show that Indian exports of sensitive electronics, as listed in the Ved MMKP’s report, increased significantly from mid-2022, the FT report said.

Russia received at least $4.9 million worth of electronics, including drones from an Indian company named Innovio Ventures. It also shipped another $600,000 worth of goods to Kyrgyzstan, a Central Asian nation that has become a backchannel for Russia’s imports of sanctioned items.

At least one sanctioned Russian company, Testkomplekt, received $568,000 in electronic equipment for use in radio-electronic systems, according to FT.

India is viewed as an alternative market for crucial components and explored investment in Indo-Russia electronics development, even as the South Asian nation strengthened ties with the US under Prime Minister Narendra Modi.