On October 30, the US Treasury Department sanctioned around 400 entities and individuals, including 19 Indian companies, for allegedly “supporting Russia’s military industrial base.” This move blocks any US-based or US-controlled properties of these entities and prohibits American citizens and entities from engaging in business with them. Despite this, many of the Indian firms involved say their operations remain largely unaffected, citing their primary focus on Russian markets and the absence of Indian government restrictions on such trade. 

Minimal US Exposure Shields Many Indian Firms

For companies like Maharashtra-based Khushbu Honing, the sanctions are unlikely to disrupt operations significantly. “Hardly 30% of our Rs. 15 crore turnover depends on Russia. The rest of our business is domestic,” said Ajeet Samani, Khushbu’s owner. The company has no business ties with the US, and their transactions are conducted in rupees rather than US dollars or euros. According to the US Treasury, Khushbu Honing had allegedly shipped machine tools to Russia-based Unimatik, which supplies CNC equipment to the Russian defence sector. However, Samani insists that the business remains unaffected by the sanctions.

Delhi-based TSMD Global has similarly downplayed the impact. “We don’t know who is sanctioned and who is not. We purchase from the open Indian market and then export it,” said Rahul Kumar Singh, the company’s director. TSMD Global was sanctioned for allegedly shipping controlled items worth approximately ₹3.6 crore to Russian firms. Singh emphasised that if the Indian government imposes restrictions, TSMD Global would comply but noted that such restrictions have not been implemented.

Companies With No Direct US Ties Feel Little Pressure

Meerut-based Shreegee Impex Private Limited, with an annual turnover of around ₹70 crore, also foresees minimal impact from the sanctions. The Treasury Department claimed that Shreegee had supplied dual-use items to Russia, including parts for automobiles and other industrial uses. However, Praveen Tyagi, the company’s director, stated that their trade focus remains entirely on Russia, distancing them from any potential US repercussions.

Likewise, Tirumala Raja, the CEO of Bangalore-based Emsystech, feels unaffected by the sanctions. Raja mentioned that his firm’s imports from the US are used exclusively within India and have no connection to defence products. Although Emsystech had reportedly sent shipments of electronic circuits and capacitors to Russia, Raja explained that these items were intended for medical electronics and not for military applications.

Publicly Listed Companies and Tech Giants Also Impacted

The sanctions list includes two publicly listed companies, Galaxy Bearings Limited and Lokesh Machines. Lokesh Machines, headquartered in Haryana, works with international clients like John Deere, Volvo, Honda, and Suzuki. Both firms have been approached for comments on how they expect the sanctions to affect their operations.

The sanctions on Shreya Life Sciences Private Limited are particularly notable, as they relate to advanced servers shipped to Russia, allegedly equipped with high-end Nvidia processors optimised for artificial intelligence. According to reports, Shreya exported servers valued at $300 million, utilising technology from major American companies. Shreya has yet to comment on how the sanctions will impact their business.

Outlook for Indian Firms Sanctioned by the US

Overall, many of the sanctioned Indian companies indicate limited concern regarding the potential impact on their operations. They attribute this to their minimal exposure to US markets and the strong demand for their products in Russia. While the US Treasury’s sanctions serve as a clear warning against doing business with Russia’s defense industry, Indian regulations continue to govern these businesses in the majority and currently place no restrictions on their trade with Russia.

As long as the Indian government does not issue its own restrictions, these firms appear likely to continue business as usual with Russian clients.