Russia turns to India, Serbia, and China to dodge Western sanctions — ISW

This information comes from the Institute for the Study of War (ISW).

According to ISW, citing leaked reports published by the Financial Times (FT), Russia’s Ministry of Industry and Trade devised a plan in October 2022 to allocate nearly $1 billion toward securing critical electronic components. This plan included the idea of establishing production facilities in India to access these components.

The Financial Times further revealed that leaked documents indicate Russia has been covertly acquiring sensitive dual-use electronics from India, using "significant reserves" of Indian rupees built up by Russian banks through increased oil exports to the country.

How far Russia has moved forward with this plan remains unclear, ISW analysts stated. But it seems that Russia is involved in a larger scheme to evade sanctions and procure electronic components for its defense industry through foreign intermediaries.

ISW also highlighted Russian leader Vladimir Putin's meeting with Serbian Deputy Prime Minister Aleksandar Vulin on September 4, during the Eastern Economic Forum (EEF) in Vladivostok. The two discussed lifting trade barriers to halt the drop in bilateral trade. Vulin emphasized that Serbia would not impose sanctions on Russia and would not allow its territory to be used for "anti-Russian" activities.

ISW analysts suggest Vulin’s comments could be an attempt to ease tensions with Putin following Serbia’s recent purchase of 12 Rafale fighter jets from France, signaling a move to diversify away from Russian arms suppliers.

On the same day, Putin also met with China’s Vice President, Han Zheng. Kremlin spokesman Dmitry Peskov said Putin had updated Chinese officials on his recent visit to Mongolia, where he had emphasized growing trade and cooperation between China and Mongolia.

ISW notes that foreign companies and banks, including those in China, are showing increasing caution in dealing with Russian entities, likely due to fears of secondary Western sanctions that could target Russia’s efforts to circumvent international restrictions.

Russia seems to be leaning on nations like India, Serbia, and China to find ways around Western sanctions, ISW concludes.

• The U.S. has warned countries engaged in trade with Russia that they risk facing secondary sanctions if they allow Russian banks to establish branches on their soil to finance Russia’s military-industrial complex.