Russia uses oil profits to acquire critical electronics in India secretly

Russia secretly acquired sensitive goods in India, writes the "Financial Times." Moscow also explored whether it was possible to construct special facilities to secure the components needed for waging war.

In October 2022, Russia developed a confidential plan worth $1 (CAD 1.3) billion, allowing the Kremlin to secure channels for transferring critical electronics. Everything was supposed to take place secretly from the West, emphasizes the "FT," citing Russian state correspondence.

Russia planned to use large rupee reserves, which Moscow received from New Delhi for oil supplies, for this purpose. Key dual-use technologies, such as drones and missiles, can be used for both civilian and military purposes. Such technologies are subject to Western officials' control.

The Russian Consortium for Foreign Economic Activity and International Intergovernmental Cooperation in Industry was supposed to be involved in purchasing critical components from India. This organization is closely linked to the security service.

"Moscow even envisaged pumping investment into Russo-Indian electronics development and production facilities, according to the leaked files," reveals the FT. These documents confirm that India has moved closer to Russia despite Prime Minister Narendra Modi signing a series of Indo-American cooperation agreements on advanced jet engines and artificial intelligence.

To what extent has Russia managed to implement the plan? That remains unknown. However, detailed data regarding trade flows suggest that relations with India have deepened concerning specific categories of goods identified in Russian correspondence.

Vadim Poida, president of the aforementioned consortium, was supposed to oversee the project. The plan involved developing a five-stage process allowing Moscow to spend rupees in exchange for delivering components from India. The plan included "representatives of the relevant Indian state and private businesses."

An anonymous Indian businessman told the "FT" that some of the rupees were to go to India to ensure the production process of dual-use components. "It could be low-value electronics items like the ones found in washing machines or refrigerators," he explained. And such products could already make their way to Russia.

The "FT" reminds that India is buying Russian oil on a large scale, and trade exchanges reached a record level of approximately CAD 90 billion in the fiscal year 2023/24. That's five times more than before the outbreak of the full-scale war in Ukraine.