Indian entities exporting to Russia have been cautioned by the US and the EU to carefully evaluate their exports to ensure that not only the exported items but also their components do not fall in the prohibited category to avoid economic sanctions for supporting Moscow’s war in Ukraine, industry sources have said.

“Recently officials from sanctions teams of both the US and the EU met Indian industry representatives to educate them on the 50 sanctioned items featuring in their joint list of common high priority items and the steps they needed to take to ensure that these don’t flow into Russian battlefield,” a source tracking the matter told businessline. 

The industry has been warned by teams from the US Bureau of Industry and Security and the Office of Foreign Assets Control and one led by EU sanctions envoy David Sullivan, that visited India in December 2024 and earlier, that even if the products exported to Russia were for civilian use they would attract sanctions if their components, once taken apart, had potential military uses, the source said.

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The list of common high priority items, jointly prepared and updated by the US, the EU, the UK and Japan, include electronic components such as integrated circuits and radio frequency transceiver modules, as well as items essential for the manufacturing and testing of the electronic components of the printed circuit boards, and manufacturing of high precision complex metal components retrieved from the battlefield.

“Since the list of banned exports include items that go into a large number of civilian and consumer goods including electronic integrated circuits, it is not so easy for Indian companies to ensure that components of non-military use items don’t fall in the category of identified items,” the source said.

However, since the actions taken by the West against sanctioned entities are stringent including account and asset freeze and export ban, Indian companies want to pay heed.

The US announced sanctions against 400 entities and individuals from across the world on October 30, 2024, for “aiding” Russia’s war against Ukraine, which included 19 private entities from India and two Indian nationals.

On 16 December 2024, the EU added 32 new companies to the list of those supporting Russia’s military and industrial complex in its war against Ukraine which included Indian company Triac Electronics.

“There is a general perception that the pressure from the US on Indian exporters to Russia to strictly comply with the list of sanctioned items may go down somewhat once Donal Trump assumes office as the US President later this month but the EU and other countries such as the UK, Japan, Australia and Canada will not back off. So Indian exporters need to be careful,” a government source said.

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India’s exports to Russia in FY24 increased 35.41 per cent (year-on-year) to $4.26 billion from $3.14 billion the previous fiscal against an overall fall of 3.10 per cent in the country’s overall goods exports to $437 billion from $451 billion previous fiscal.

In the April-October 2024 period, India’s goods exports to Russia increased 30.9 per cent to $3.04 billion. Top exported items include nuclear reactors, boilers, machinery and mechanical appliances, electrical machinery, equipment and parts, chemicals and pharmaceutical products.