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Ukraine: Western sanctions-hit Russia requests India to provide over 500 spare parts

Ukraine: Western sanctions-hit Russia requests India to provide over 500 spare parts

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Virendra Pandit

 

New Delhi: Severely hit because of the West and its allies’ comprehensive sanctions, the invasion of Ukraine which Russia started on February 24 this year is now biting Moscow itself, forcing it to request New Delhi to deliver spare parts for hundreds of products urgently.

According to the reports on Tuesday, Russia’s unusual request to India includes the requirement of parts for over 500 products, ranging from cars to aircraft to trains, as sanctions are squeezing its ability to keep vital industries running.

But India, while keen to narrow a ballooning trade deficit with Russia, is treading cautiously as it might fall foul of Western sanctions.

Reports suggested that Russia’s Ministry of Industry and Trade asked large Indian companies to supply lists of raw materials and equipment they needed. These requests came before Indian Foreign Minister Subrahmanyam Jaishankar’s visit to Moscow early in November.

Prime Minister Narendra Modi’s government has not yet joined Western countries in openly criticizing Moscow for the war in Ukraine. But New Delhi has increased purchases of Russian oil manifold, which have cushioned Moscow from some impacts of sanctions.

During his Moscow visit, Dr. Jaishankar said India needed to boost exports to Russia to balance bilateral trade currently tilted towards Moscow.

The West-led sanctions, which started after the Russian invasion of Ukraine, have crippled supplies for some crucial sectors in Russia. For example, Russian airlines are facing an acute shortage of parts because almost all planes are foreign-made. Car parts are also in demand, as global automakers have left the market. The Russian trade industry has sent a list of car parts needed from India and some other countries.

Russia also needs car engine parts like pistons, oil pumps, ignition coils, bumpers, seatbelts, and infotainment systems.

For aircraft and helicopters, Russia requested 41 items, including landing gear components, fuel systems, communication systems, fire extinguishing systems, life jackets, and aviation tires.

Besides, Moscow needs raw materials to produce paper, paper bags, and consumer packaging and materials and equipment to produce textiles including yarns and dyes. Russian metals producers said Western sanctions and self-sanctioning by some suppliers made it difficult for industrial companies to get imported equipment, spare parts, materials, and technologies in 2022. The Russian import list also includes nearly 200 metallurgy items.

For decades, Russia has been India’s largest supplier of military equipment and is the fourth-biggest market for Indian pharmaceutical products. With purchases of Russian oil soaring and coal and fertilizer shipments also strong, India is looking for ways to rebalance trade.

Indian imports from Russia grew nearly five times from USD 6 billion last year to USD 29 billion this year, but exports fell from USD 2.4 billion to USD 1.9 billion. With Russian requirements, New Delhi hopes to boost exports to nearly USD 10 billion over the coming months.

But some Indian companies are reluctant to export to Russia lest they also be sanctioned by the West. Also, they are not too sure because of a lack of clarity about payments and challenges to securing insurance.

“There is a hesitancy among exporters … particularly on sanctioned items,” said Ajay Sahai, Director-General of the Federation of Indian Export Organisations (FIEO), a body supported by India’s commerce ministry.

He said even small- and medium-sized exporters who could meet some requests and had previously exported to Iran after Western sanctions were not enthusiastic.

Large Indian lenders are also reluctant to process direct rupee trade transactions with Russia, months after they put the mechanism in place, for fear of being sanctioned.

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