Most of the 19 Indian companies recently sanctioned by the US government, along with over 380 other firms from NATO countries for trading with Russian companies, have stated that the sanctions would not have any impact on their operations. The reason cited is the absence of restrictions on commercial interactions from the Government of India. Notably, on 30 October, approximately 400 entities and individuals were sanctioned by the US government for “supporting Russia’s military-industrial base.” Nineteen Indian companies and two individuals, who are co-directors of one of the sanctioned companies, were also included in the sanctions.
As a result of these US sanctions, any property belonging to these companies and entities within the US, or under US control, will be blocked and reported to the Office of Foreign Assets Control (OFAC). Additionally, Americans and companies operating within the US are prohibited from conducting any transactions with these sanctioned entities. However, these companies don’t have any business in the US, they mostly deal in India and with Russia, therefore they won’t be impacted by the sanctions.
Khushbu Honing
According to a Hindustan Times report, Maharashtra-based Khushbu Honing has an annual turnover of ₹15 crore. Khushbu Honing makes CNC honing machines. In a statement, its owner Ajeet Samani stated that only about 30% of the total turnover depends on Russia, with the rest being domestic business. He noted, “We are not doing any business with the US, so we are not really affected. I am paid in INR, not in dollars or euros.” However, the sanctions may affect any future plans to import and export with the US. He added, “If I have to import or export to or from the US in the future, I may have to use another company, like a sister company. However, there is no demand for my machines in the US because there are many manufacturers there.”
Despite this, he plans to discuss the matter with the Engineering Export Promotion Council of India for a clearer understanding, as everything is still in the initial phase. He said, “The US and Europe cannot supply to Russia, so Russia is naturally looking to India and China.” Khushbu Honing was sanctioned for sending at least five shipments of advanced machine tools and accessories to Unimatik, a Russia-based firm also sanctioned by the US for supplying Russian defence with CNC machines and related parts.
In a statement, the US Treasury Department stated, “As of January 2024, U.S.-designated, Russia-based Limited Liability Company AK Microtech sought to evade sanctions by purchasing microelectronics equipment via Khushbu.”
TSMD Global
Another company sanctioned by the US is the Delhi-based TSMD Global, for shipping CHPL items worth approximately ₹3.6 crore to Russia-based companies, including Elektron Komponent, and sanctioned firms LLC VMK, Alfa LLC, and Joint Stock Company Avtovaz. In a statement, TSMD Global’s director, Rahul Kumar Singh, said he did not understand why his company was sanctioned.
In FY24, the company’s turnover was over ₹10 crore. It buys products from the open Indian market and resells them to Russia, with all of its income derived from Russia. Transactions are processed through Russia’s Sberbank, which has a branch in Delhi. He added that it remains unclear how the US sanctions would affect the company’s bottom line.
He said, “We don’t know who is sanctioned and who is not. We purchase from the open Indian market and then export. Some of these products may have originated in the US, the EU, Japan, China, Malaysia, Hong Kong, and even India. We can’t control where electronic components are ultimately used.” The State Department said that TSMD Global shipped US and EU-origin CHPL items, such as electronic integrated circuits, central processing units, and other fixed capacitors, to Russia between July 2023 and March 2024.
Singh stated, “We export electronic parts, garments, and parts for automobiles. We have been doing this for a long time. We actually want to work more closely with Russia. We operate according to Modi ji. He often visits Russia, and we are getting business from there. Sometimes the customs department asks if what we export is used in aviation. We tell them that the same component is used in planes and in mobiles.”
Singh sees no reason to halt business with sanctioned Russian companies unless the Government of India imposes restrictions. He said, “If we are getting business from there and our government’s relations with that country are okay, why shouldn’t we?”
Shreegee Impex Private Limited
Meerut-based Shreegee Impex Private Limited is another company sanctioned by the US. The company’s director, Praveen Tyagi, categorically stated that there is no impact on the company from the sanctions. With an annual turnover of ₹70 crore, the company deals exclusively with Russia. In a statement, the Treasury Department noted that Shreegee had listed Kamaz Publicly Traded Company, a US-sanctioned Russian company, as one of its customers.
The statement claimed that Shreegee had sent “hundreds of high-priority dual-use items, including aviation-related parts, as well as transmission belts and rubber products for automobile assembly, to Russia-based manufacturers.” Tyagi said that Shreegee sent transmission belts and hoses to Russian companies and that the products were not related to aviation. Furthermore, he clarified that Kamaz was not Shreegee’s customer.
Praveen Tyagi said, “I don’t know why these measures have been imposed on us. But it will not have any impact on us, because we neither import from the US nor export to the US”.
Emsystech
The next company on the list is Bengaluru-based Emsystech, with an annual turnover of ₹20 crore. Its owner, Thirumala Raja, is confident that his company will not be affected by the sanctions, as it only imports small electronic components from the US and has minimal dealings with American clients.
He said, “The components we bought from the US are meant solely for use in India due to geopolitical issues. We exported some microprocessor components to Russia, sourced from Hong Kong in 2022, but these were intended for medical electronics, not defence.” According to the Treasury Department, Emsystech had sent over 800 shipments, including electronic integrated circuits and tantalum capacitors, to Russia-based end-users like US-designated Basis Trade Prosoft LLC, which supplies industrial computers, components for automated process control systems, and radio-electronic components.
Raja noted that the exports were limited to 2022 and were for medical electronics. He added that his company has no defence-linked clients outside India, and that it supplies power solutions and small microcontrollers to the Indian Navy via Bharat Electronics Limited.
Other Companies on the List
Another company sanctioned by the US is Denvas Services Private Limited, whose four directors are Russian nationals. According to the Treasury Department, these directors are involved in defence procurement schemes, and the company has been used by Russia to procure US-origin microelectronics for use in its advanced conventional weapons. The department noted that the most recent transactions occurred in 2023.
Mumbai-based Shreya Life Sciences Private Limited has also been sanctioned for exporting US trademarked technology worth tens of millions of dollars to Russia, including advanced servers designed for AI. According to the Treasury Department, Russia “seeks to procure these for its weapons programs.”
On 28 October, Bloomberg reported that 1,111 units of Dell Technologies Inc were exported to Russia by the company, including advanced servers. The transactions occurred from April to August this year, with 998 of these servers containing high-end processors optimised for AI made by Nvidia Corp. or Advanced Micro Devices Inc., according to Dell’s website.
Bloomberg noted that these shipments were valued at USD 300 million. Two sanctioned Russian trading companies, Mein Chain Ltd and I.S LLC, imported these shipments.
Two of the 19 sanctioned companies, Galaxy Bearings Limited, headquartered in Gujarat, and Lokesh Machines, headquartered in Haryana, are publicly listed. Lokesh’s clients include American companies John Deere and Cummins, Sweden’s Volvo, and Japan’s Honda and Suzuki.
Hyderabad-based RRG Engineering was also sanctioned. Its chairperson and managing director, GM Ganga Rao, was an industry expert on the Ministry of Civil Aviation’s 2018 task force on fast-tracking unmanned aerial vehicle (UAV) technology, led by Jayant Sinha. The Treasury Department reported that the company had sent over 100 shipments of microelectronics to Russia-based Arteks since 2023. Arteks has also been sanctioned by the US.
Transactions are legal in India: MEA
MEA spokesperson Randhir Jaiswal said that the transactions cited by the US do not violate Indian laws, and stressed that India strictly follows non-proliferation policies. He said, “India has a robust legal and regulatory framework on strategic trade and nonproliferation controls. We are a member of key multilateral export control regimes and effectively implement relevant UNSC sanctions, including Resolution 1540 on non-proliferation.”
Talking about the transactions mentioned by the US, he said, . “Our understanding is that the sanctioned transactions are not in violation of Indian laws. We are in touch with the US authorities to clarify issues.”
