The US has announced sanctions against 19 private entities from India and two Indian nationals, which featured in a list of nearly 400 entities and individuals sanctioned from across the world, for “aiding” Russia’s war against Ukraine.
The US State Department’s decision to target a significantly large number of Indian companies this time for allegedly dealing in items critical to Russia’s military-industrial base has put the Indian industry and the government on guard regarding future actions, sources said.
Of added significance is the ongoing investigation in the US on an Indian national’s role in a plot to assassinate Sikh separatist Gurpatwant Singh Pannun that has somewhat strained ties.
The Department seeks to disrupt the networks and channels through which Russia procures technology and equipment from entities in third countries to support its war effort, per a statement issued by the US Department of State on Wednesday.
“Entities based in the PRC, India, Kazakhstan, the Kyrgyz Republic, Türkiye, and the United Arab Emirates (UAE), among other countries, continue to sell these items and other important dual-use goods to Russia, including critical components that Russia relies on for its weapons systems to wage war against Ukraine,” it said.
Sanctioned companies
The sanctioned Indian companies include Futrevo, Ascend Aviation, TSMD Global, and Mask Trans, all accused of selling sanctioned items to Russian companies including ones manufacturing drones and air crafts.
Indian companies doing business with Russia are wary as many do not have the resources to verify an entity that they are dealing with. The US government had got in touch with some industry players in India to educate them on dual-use goods and their possible connections with Russian sanctions to help them avoid third country sanctions but the situation is still difficult for many companies to handle.
“The sanctions pose challenges for Indian companies navigating international trade compliance and strategic autonomy . At times despite due diligence by the Indian companies, verifying an entity, in which sanctioned entities having controlling stake, is a Herculean task to manage , beyond the resources of many SMEs,” pointed out Ajay Sahai, DG, Federation of Indian Export Organisations.
The latest move by the US is in line with what US Ambassador to India Eric Garcetti shared in an interview with businessline earlier this year.
“The US together with dozens of allies are standing up against the idea that one country by brute force should be able to take the land of another. Let me hope that India will continue to recognise that principle and work with us to identify those companies that are fuelling the Russian war machine…,” Garcetti had said.
India’s exports to Russia have not increased to its full potential, despite its imports of Russian oil touching a record high, is mostly because of concerns around possible third country sanctions, according to an Indian official.
This is especially true for network products that are part of a global value chain, such as computers, electronics and telecom equipments,
India’s imports from Russia in FY24 was valued at $61.43 billion, posting a growth of 33 per cent over the previous fiscal, but its exports were much lower at $4.26 billion despite a 35 per cent growth.