In a startling revelation, leaked Russian state correspondence has unveiled Moscow’s clandestine efforts to establish a covert trade channel with India. The primary objective of this secretive network is to secure critical electronics and components for Russia’s ongoing war effort in Ukraine, whilst circumventing Western sanctions. The confidential plans, drawn up by Russia’s industry and trade ministry in October 2022, outline an ambitious strategy to utilise approximately Rs82bn ($1bn at the time) of rupee reserves accumulated from burgeoning oil sales to India.
These funds were earmarked for procuring crucial goods that were previously sourced from countries now deemed “unfriendly” by Moscow. At the heart of this covert operation lies the targeting of dual-use technologies – items with both civilian and military applications – which are subject to stringent Western export controls. The leaked documents suggest that Russia even contemplated investing in joint Russo-Indian electronics development and production facilities. The extent to which these plans have been implemented remains unclear.
However, detailed trade flow data indicates a significant deepening of the relationship between Russia and India, particularly in the specific categories of goods identified in the Russian correspondence. This burgeoning economic alliance has not gone unnoticed by Washington. US Deputy Treasury Secretary Wally Adeyemo issued a stern warning to India’s top business organisations in July, cautioning that any financial institution engaging with Russia’s military-industrial complex risks facing sanctions, regardless of the currency used in transactions.
Despite Prime Minister Narendra Modi’s public stance lamenting the impact of the Ukraine invasion on developing economies, India has effectively extended an economic lifeline to Russia in the wake of Western sanctions. The total trade between the two nations reached an unprecedented $66bn in the 2023-24 financial year, marking a fivefold increase from the year preceding the invasion. The leaked correspondence reveals the involvement of Alexander Gaponov, a Russian central government official and deputy head of the ministry’s “radio-electronics” division. Gaponov sought assistance from the Consortium for Foreign Economic Activity and International Interstate Cooperation in Industry, an opaque Moscow-based organisation with ties to Russian security services, to develop plans for acquiring critical components from India.
The consortium’s president, Vadim Poida, outlined a five-stage plan to utilise Russia’s rupee reserves and establish a steady supply of dual-use components. This strategy included setting up a “closed payment system” between Russian and Indian companies, beyond Western oversight, and exploring the use of digital financial assets. As global tensions continue to rise, this clandestine trade network between Russia and India serves as a stark reminder of the complex geopolitical landscape and the ongoing challenges faced by the international community in enforcing sanctions and maintaining global security.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.