In the bustling Andheri district of Mumbai, Shreya Life Sciences operates from a modest office space. While inconspicuous, this pharmaceutical company is at the center of a high-stakes technology trade with Russia that has drawn attention from the U.S. and European Union (EU) due to its implications for sanctions enforcement.
Advanced Technology Exports Spark International Attention
Between April and August 2024, Shreya Life Sciences exported 1,111 units of Dell Technologies Inc. PowerEdge XE9680 servers to Russia, each equipped with Nvidia H100 processors designed for artificial intelligence. These exports, valued at approximately $300 million, were intended for two Russian companies: Main Chain Ltd. and I.S LLC. The U.S. and EU have restricted items like these servers to prevent use in military applications.
However, Indian regulations permit these sales as India does not participate in the sanctions. Since Russia’s invasion of Ukraine in 2022, countries like India and China have grown as intermediaries for restricted technology exports to Russia.
Western Concerns Over Russia’s Military Access
The international community has raised concerns about how dual-use technologies, those with both civilian and military applications, are entering Russia through countries that continue trade. Ukrainian officials, including Andriy Yermak, Chief of Staff to President Volodymyr Zelensky, have expressed frustration with Russia’s ongoing access to technology that could be repurposed for military systems. In an October statement, Yermak urged sanctions-compliant nations to restrict any financial gain at the expense of Ukrainian lives.
Data reveals that while India is a significant intermediary for these products, Malaysia is their origin. Malaysian Prime Minister Anwar Ibrahim recently visited Moscow to discuss enhanced trade relations, focusing on high-tech exports, which has only deepened Western concerns over how these technologies might be used.
India’s Complex Economic and Diplomatic Position
Despite external pressures, India continues this trade with Russia. Recently, U.S. Deputy Treasury Secretary Wally Adeyemo cautioned that Indian financial institutions could face sanctions if they deal with Russia’s military sector. However, New Delhi has not aligned with Western sanctions, likely due to India’s long-standing dependency on Russian defense equipment and its role as a vital energy supplier to India following EU bans on Russian oil.
In September 2022, Shreya Life Sciences began exporting computer hardware to Russia. Despite Western sanctions, its sales have continued through strategic partnerships with Russian firms like Main Chain and I.S LLC. For Shreya, these transactions represent a potential financial opportunity, but at a geopolitical cost that could affect India’s international relationships.
Shreya Life Sciences’ Historical Dependence on Russian Markets
Founded by Sujit Kumar Singh in Moscow in 1995, Shreya initially built its reputation in the pharmaceutical industry and has since expanded with its own manufacturing operations for drugs like insulin and antibiotics. Today, Russia remains Shreya’s largest market, with exports totaling $22 million between January 2022 and August 2024. However, this dependence has not been without challenges. In 2015, Shreya faced financial hardship when the Russian ruble collapsed following Russia’s annexation of Crimea.
To remain solvent, Shreya relied on loans from Promsvyazbank PJSC, a Russian state-owned bank with strong ties to the military sector. Despite sanctions against both the bank and its executives, Shreya leveraged these funds to maintain operations in Moscow. To this day, 85% of Shreya’s debt is to Promsvyazbank, underscoring the company’s ongoing reliance on Russian resources.
Future Implications for India and Global Relations
The U.S. and EU continue to urge India to regulate these transactions more closely. As Indian officials have investigated Western allegations, the Indian government has assured that it complies with all national and international obligations related to exports of sensitive goods. Nevertheless, the prominence of companies like Shreya Life Sciences in supplying dual-use technology to Russia reveals the complexities of enforcing international sanctions in a multipolar world.
While Shreya Life Sciences has reportedly stopped trading with entities sanctioned by the U.S., its recent surge in exports shows that the geopolitical role India occupies is increasingly scrutinized. Whether India’s government will respond to these challenges or continue to prioritize its own economic interests remains an open question.
Conclusions
As Shreya and other firms navigate these restrictions, the West may continue to apply diplomatic pressure. However, with India’s deepening trade ties and strategic autonomy, the role of Indian companies in technology transfers to Russia will likely remain a critical topic for both economic and foreign policy analysts.
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