Russia has been quietly building a secret trade network with India to get its hands on stuff for its war in Ukraine.
Reports say that in October 2022, Russia’s industry and trade ministry spent roughly $1 billion to secure pivotal tech through hidden channels.
These channels were meant to dodge Western governments’ eyes, using piles of rupees that Russian banks collected from big oil sales to India. There were even plans to set up facilities in India to produce these components.
They were after dual-use technologies—stuff that could work for both civilian and military purposes. These goods are tightly controlled by the West, so Russia wanted a way around that.
Vladimir Putin’s plan was to use the rupees his country earned from oil sales to fund these transactions without drawing any attention. And they were doing all this while India’s Prime Minister Narendra Modi was busy strengthening ties with the U.S.
During a visit to Washington last year, Prime Minister Narendra Modi signed deals on advanced jet engines, artificial intelligence, and many other agreements. Despite this, Russia saw an opportunity with India.
The Biden administration had hoped India would distance itself from Russia after the Ukraine invasion. Instead, Modi has doubled down on his friendship with Putin. He hasn’t condemned the invasion and India continues to buy the S-400 missile system.
So far, America has actually not enforced sanctions against India for the arms deals. However, if the Russia-Ukraine situation gets worse, they might push India to choose a side.
India’s ties with other U.S. rivals, China and Iran, only add to the tension. As the largest democracy and an emerging economic powerhouse, India’s actions matter.
In July, Wally Adeyemo, the U.S. deputy treasury secretary, sent a letter to three major Indian business groups. He warned them that “any foreign financial institution doing business with Russia’s military-industrial sector risks facing sanctions.”
Wally also said that “this risk remains high no matter what currency is used in a transaction.” Keep in mind that Russia is actively trying to dethrone America and its dollar as the ones in charge of the global economy.
Judging by NATO ally Turkey’s recent decision to join the BRICS and the many strategic diplomatic visits Putin has made this year, analysts think the de-dollarization efforts might succeed way sooner than initially thought.
