Most of the 19 Indian firms which were sanctioned by the US authorities for buying and selling with Russian firms mentioned that they have been not likely affected by the sanctions as they solely handled Russia, and since the Indian authorities had not positioned any restrictions on such business interactions.
The US authorities, on October 30, sanctioned practically 400 entities and people, together with 19 Indian firms, for “supporting Russia’s army industrial base”. Two people, who’re the co-directors of one of many sanctioned firms, have been additionally sanctioned. As a consequence of these sanctions, all properties of those entities, throughout the US or in command of US shall be blocked and shall be reported to the Workplace of Overseas Belongings Management (OFAC). People and all these throughout the US are prohibited from conducting any transactions with the sanctioned entities.
Ajeet Samani, the proprietor of Maharashtra-based Khushbu Honing, mentioned that hardly 30% of his ₹15 crore turnover relied on Russia. “Remainder of our enterprise is home. We’re not doing any enterprise with the US so we’re not actually affected. I get paid in INR, not in {dollars} or euros,” he mentioned. This may have an effect on Khushbu Honing’s future imports from and exports to the US. “Tomorrow, if I’ve to import or export one thing to or from the US, I’ll need to do it utilizing one other firm, like a sister firm. Nevertheless, there’s not requirement for my machines within the US as a result of there are numerous producers within the US,” he mentioned.
However he nonetheless intends to speak to the Engineering Export Promotion Council of India to get a greater image as all the pieces remains to be within the preliminary section. “US and Europe can’t provide to Russia so Russia is of course trying to India and China,” he mentioned.
Khushbu Honing has been sanctioned for sending at the very least give shipments of superior machine instruments and equipment to Russia-based Unimatik that has been sanctioned by the US for supplying Russian defence with CNC machines and associated components. “As of January 2024, U.S.-designated, Russia-based Restricted Legal responsibility Firm AK Microtech sought to evade sanctions by buying microelectronics tools by way of Khushbu,” the US Treasury Division mentioned in its assertion.
Rahul Kumar Singh, the director of Delhi-based TSMD World, which has been sanctioned for transport CHPL gadgets value $430,000 (~ ₹3.6 crore) to Russia based mostly firms together with Elektron Komponent and sanctioned firms LLC VMK, Alfa LLC, and Joint Inventory Firm Avtovaz, mentioned he didn’t perceive why they’d been sanctioned.
In FY24, Singh mentioned that TSMD World’s turnover was greater than ₹10 crore. TSMD World buys merchandise from the open Indian market and exports them to Russia and all the corporate’s earnings comes from Russia. The transactions are processed via Russia’s Sberbank which has a department in Delhi. He doesn’t know the way the sanctions will have an effect on the underside line.
“We don’t know who’s sanctioned and who just isn’t. We buy from the open Indian market after which export it. A few of these merchandise might need originated within the US, in EU, in Japan, in China, in Malaysia, in Hong Kong, and even in India,” he mentioned. “We are able to’t management the place digital elements are then used,” he mentioned. As per the State Division’s assertion, TSMD World had shipped US and EU origin CHPL gadgets corresponding to digital built-in circuits, central processing items and different fastened capacitors between July 2023 and March 2024.
“We export digital components, clothes, components for cars. We now have been doing this for therefore lengthy. We, actually, wish to carefully work with Russia. We work in keeping with Modi ji. He repeatedly goes to Russia. We’re getting enterprise from there,” Singh mentioned. “At instances the customs division asks us once we export whether or not it’s used for aviation. We inform them that the identical element is utilized in planes and in mobiles,” he mentioned.
On Friday, he didn’t know if the corporate would proceed to work with the sanctioned Russian firms. “If we’re getting enterprise from there and our authorities’s relations with that nation are okay, why shouldn’t we?”
However Singh is evident that if the Indian authorities imposes restrictions, TSMD World will cease, but it surely has not to this point.
Praveen Tyagi, director of Meerut-based Shreegee Impex Personal Restricted, mentioned that his firm just isn’t affected by the sanctions in any respect as a result of his firm, which has an annual turnover of about ₹70 crore, offers solely with Russia. The Treasury Division mentioned that Shreegee had listed a Russian firm sanctioned by the US, Kamaz Publicly Traded Firm, as considered one of its clients and mentioned that it had despatched “tons of of high-priority dual-use gadgets, together with aviation-related components, in addition to transmission belts and rubber merchandise for vehicle meeting, to Russia-based producers”. Tyagi mentioned that his firm provided transmission belts and hoses to Russian firms however not aviation-related merchandise, and that Kamaz was not his buyer.
The proprietor of Bangalore-headquartered Emsystech, Thirumala Raja, too mentioned that he was not affected as his firm was solely importing small digital elements from the US and there are usually not many dealings with American shoppers. “No matter elements we now have purchased from the US, they’re meant to be used in India solely due to the geopolitical points. We exported some microprocessor elements and different elements to Russia that we imported from Hong Kong in 2022 however they have been associated to medical electronics, nothing defence associated,” he mentioned. This firm has an annual turnover of about ₹20 crore, as per Raja.
The Treasury Division mentioned that Emsystech had despatched over 800 shipments, together with of digital built-in circuits and tantalum capacitors, to Russia-based end-users corresponding to U.S.-designated Foundation Commerce Prosoft LLC, a provider of business computer systems, elements for automated course of management programs, and radio-electronic elements. Raja mentioned that this occurred till 2022 and the exports have been meant for medical electronics. He mentioned that his firm has no defence-linked shoppers abroad, and that his firm provided energy options and small microcontrollers to the Indian Navy by way of Bharat Electronics Restricted.
A Delhi-based firm, Denvas Companies Personal Restricted, has been sanctioned as a result of three of its 4 administrators are Russian nationals who, as per the Treasury Division, are concerned in defence procurement schemes and the corporate itself has been utilized by Russia to acquire US-origin microelectronics to be used in its superior typical weapons as lately as 2023.
One other firm, Mumbai-based Shreya Life Sciences Personal Restricted, has been sanctioned for transport US trademarked expertise value tens of thousands and thousands of {dollars}, together with superior servers designed for AI, to Russia which Russia, as per the Treasury Division, “seeks to acquire for its weapons applications”. On October 28, Bloomberg reported that Shreya exported 1,111 items of Dell Applied sciences Inc.’s most-advanced servers to Russia in April-August 2024 and 998 of those servers contained high-end processors optimised for AI made by Nvidia. Corp. or Superior Micro Gadgets Inc., in keeping with Dell’s web site. These shipments, as per Bloomberg, have been value $300 million and imported by two Russian buying and selling firms, Mein Chain Ltd. and I.S LLC. Mein Chain was additionally sanctioned by the Treasury Division for being a Russia-based wholesaler and importer of pc tools based in 2023 that gives “turnkey import” companies.
Of the 19 sanctioned firms, at the very least two — Gujarat headquartered Galaxy Bearings Restricted and Haryana headquartered Lokesh Machines — are publicly listed firms. Lokesh Machines’ shoppers embrace American firms corresponding to John Deere and Cummins, Sweden’s Volvo, and Japan’s Honda and Suzuki. HT has reached out to each firms with an in depth questionnaire.
One of many sanctioned firms is Hyderabad-based RRG Engineering whose chairperson and managing director GM Ganga Rao was an business knowledgeable for the Ministry of Civil Aviation’s 2018 process power on quick monitoring unmanned aerial car (UAV) expertise headed by Jayant Sinha.
Whereas sanctioning RRG Engineering, the US Treasury Division mentioned that the corporate had despatched over 100 shipments of microelectronics to a sanctioned, Russia-based firm referred to as Arteks since 2023.
