US Intensifies Efforts to Curb Dual-Use Exports to Russia Amid Ukraine Conflict

ENA Global 2024-08-20 15:47:56 New Delhi, Aug 20 (KNN) In a significant development, US government officials are stepping up their efforts to prevent the export of dual-use items to Russia, as the conflict in Ukraine continues to escalate. These items, which include electronic components, machine tools, drones, and related software, can be utilised for both civilian and military purposes. Sources close to the matter reveal that US officials are conducting consultation and sensitisation meetings with Indian industry representatives. The aim is to raise awareness about the critical nature of certain exports, particularly chemicals, aeronautic parts, and components that could potentially be used in missile systems and other defence equipment. This move comes in the wake of increased scrutiny on global trade with Russia. Earlier this year, a US Treasury official warned Indian banks that financial institutions dealing with Russia's military-industrial complex risk losing access to the US financial system. Deputy Treasury Secretary Wally Adeyemo emphasized that the Russian military heavily relies on imported sensitive goods and foreign financial institutions to facilitate these transactions. The focus on dual-use exports extends beyond India. US Treasury Secretary Janet Yellen expressed concerns about Chinese exports of such goods in June. The US has blacklisted over 300 Chinese companies, citing China as the primary supplier of critical items like machine tools, microelectronics, and nitrocellulose components essential for manufacturing munitions and rocket propellants. While the Indian government announced plans to liberalize export norms for certain dual-use products in January 2024, officials clarify that many items under US scrutiny are not part of India's Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) list, which requires licensing for trade. Despite these concerns, India's exports to Russia have seen a significant uptick. In 2023, total exports surged by 40 per cent to over USD 4 billion, with engineering goods nearly doubling to USD 1.32 billion. This increase coincides with Russia's ramped-up defence investments, with military spending growing by 24 per cent to an estimated USD 109 billion in 2023, according to the Stockholm International Peace Research Institute. The World Bank reports that after initial sanctions-induced recession in 2022, the Russian economy returned to growth in 2023, bolstered by fiscal stimulus, including military spending and credit expansion. Trade restrictions from G7 countries and the EU have resulted in trade diversion to nations like China, India, Turkey, and Central Asian countries. As tensions continue to simmer, the international community watches closely how these trade dynamics will evolve and impact the ongoing conflict in Ukraine. (KNN Bureau) 39006 https://knnindia.co.in/news/newsdetails/global/us-intensifies-efforts-to-curb-dual-use-exports-to-russia-amid-ukraine-conflict 2024-08-20 15:47:56 knnindia.co.in US Intensifies Efforts to Curb Dual-Use Exports to Russia Amid Ukraine Conflict