Mumbai-based drugmaker, Shreya Life Sciences, has recently made headlines for its role in supplying advanced technology to Russia, allegedly helping the country bypass Western sanctions.
The Role of Indian Companies in Supplying Restricted Technology
This pharmaceutical company, typically known for producing medicines, has been found to have exported high-tech servers containing powerful Nvidia AI chips to Russia. This revelation has raised concerns among Western nations, particularly the U.S. and European Union, as they monitor countries like India acting as intermediaries for sensitive exports.
Trade data from firms tracking global shipments shows that between April and August 2024, Shreya Life Sciences exported over a thousand Dell PowerEdge XE9680 servers to Russia. These servers, known for their advanced capabilities, come equipped with Nvidia H100 AI chips, powerful tools capable of supporting artificial intelligence operations. Western countries have prohibited Russia from accessing such high-end technology, suspecting it could strengthen Russia’s military capabilities. However, through strategic maneuvers involving intermediary countries, shipments of such restricted technology continue to reach Russia.
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Drugmaker’s Path of Technology from Malaysia to India and Russia
Though India played a significant role in the transactions, Malaysia is identified as the origin of these high-tech shipments. Malaysian officials, including Prime Minister Anwar Ibrahim, have openly expressed their intent to strengthen trade relations with Russia, contributing to the flow of restricted technology. From March to August 2024, around 1,400 Dell servers were shipped from Malaysia to India, where Shreya Life Sciences handled the final shipment to Russian buyers.
The U.S. and European governments have flagged concerns over these shipments. Recently, U.S. officials made diplomatic visits to India, urging the government to limit such exports. Yet, India, a longtime ally of Russia, has not joined the Western sanctions. Its stance has allowed Indian companies to conduct business with Russian entities, particularly in technology and energy sectors. In response to pressure from Western nations, Indian authorities investigated a few companies but found no violations. According to trade data, India continues to be one of the primary suppliers of restricted technology to Russia, following China.
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Concerns Surrounding the Export and Its Possible Military Use
The Dell PowerEdge XE9680 servers contain advanced Nvidia H100 AI chips, designed to accelerate machine learning and data analysis. These capabilities are essential not only in commercial AI development but also for military applications like electronic warfare, surveillance, and weaponry. The equipment shipped by Indian Drugmaker, Shreya Life Sciences falls under a category of dual-use goods, which can be used for both civilian and military purposes, making it subject to export controls by the U.S., EU, and other countries.
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Despite the sanctions imposed by the U.S. and EU, companies like Shreya Life Sciences have managed to find ways to continue supplying technology to Russia through third-party channels. In September 2022, Shreya made its first significant shipment of computer hardware to a Russian company, Lanprint Ltd., which has since been added to the U.S. sanctioned entities list. As Lanprint and other companies faced restrictions, Shreya continued exports by switching clients, choosing unsanctioned entities like Main Chain Ltd. This strategic approach has enabled Shreya to sustain its operations with Russian partners, while circumventing Western export controls.
Meanwhile, major tech companies involved, such as Dell, Nvidia, and AMD, insist on strict compliance with export controls. They claim to monitor and prevent any potential violations. Dell, for instance, publicly stated that they stopped selling products to Russia in early 2022. However, these controls have not stopped some of their products from reaching the Russian market through complex supply chains. In response to growing concerns, Dell has threatened to terminate contracts with distributors violating export controls.
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For Russia, Shreya Life Sciences represents a unique partner, one that was initially focused on pharmaceuticals but found a new market in technology exports. While Drugmaker Shreya remains under scrutiny from Western governments, its actions highlight the gaps in sanction enforcement and the challenge of policing global supply chains. As long as alternative routes exist, and countries like India choose not to participate in sanctions, enforcing restrictions on sensitive technologies remains difficult.
