By Hannah Ellis-Petersen/The Guardian
New Delhi December 30: Indian companies have been accused of enabling Russia’s war effort after exporting leather to Russian companies that make boots for its military in the months since the invasion of Ukraine.
Russia and India have longstanding ties and Narendra Modi’s government has not joined western countries in openly criticising Moscow over the war nor stopped Indian companies trading with Russia.
Trade has instead boomed by 413% as India has become one of the biggest purchasers of cheap Russian crude oil and Russian manufacturers increasingly look to India to supply crucial goods that can no longer come from the west.
The Ukrainian government has in response accused India of giving Vladimir Putin a “loophole” against western sanctions and in a speech this week Volodymyr Zelenskiy, the Ukrainian president, called for India to be “more active” in efforts to end Russian aggression.
The Indian leather company Homera Tanning, based in the state of Haryana, was upfront about its dealings with Russia. The company confirmed it was supplying leather hides and leather boot products worth £830,000 each month to Russia and that two of the biggest users of its materials were Donobuv and Vostok, Russian footwear companies that are primary suppliers of boots to the Russian military.
Publicly available records from 2021 show Donobuv had contracts worth millions of roubles with the Russian government to manufacture military footwear. Russian government procurements are no longer public since the invasion but the company is so important to the war effort that its workers are exempt from conscription.
“Russia was a regular market like any other market, like China or Europe, but suddenly after the war there was a boost in demand,” said Tahir Rizwan, the director of Homera Tanning. “I think one of the reasons we had this boom was because the west was no longer supplying to them.”
Rizwan said the leather sold to Russian companies was a “particular kind of leather, used only for army shoes and for safety shoes for industries like oil and gas”.
Russia had accounted for about 10% of business before the war, Rizwan said, but that was now up to about 70%, with Donobuv and Vostok among the biggest customers. Rizwan confirmed his company was now shipping seven or eight containers of leather products, both finished buffalo leather hides and the upper part of the boot, from India to Russia each month.
According to import and export data, in the five months between May and October, Homera Tanning exported more than £5m worth of leather boots products to Russia.
Aaisha International, a sister leather company to Homera Tanning that shares executive management, sold £132,000 worth of finished leather directly to Donobuv in August and another £135,000 in October.
Since the invasion of Ukraine, India has trodden carefully to balance its ties with both the west and Russia, which supplies about 70% of India’s weapons. But the lure of cheap Russian crude has made India Moscow’s second largest oil customer, with Russia rising to being India’s fifth largest trading partner, up from 25th last year.
Indian officials have defended buying oil from Russia, saying the lower price benefits India and the EU buys 10 times more fossil fuels from Russia. But the flourishing trade between India and Russia has become an increasingly sticky issue in the face of strict sanctions imposed by Europe and the US.
Alexandra Vasylenko, the special envoy on sanctions and humanitarian assistance to the Ukrainian foreign minister, said India was among the countries enabling a sanctions loophole for Russia as it “tries to fill in the void left by western companies”.
“These ongoing transactions are eroding Russia’s international isolation and impeding the Ukrainian people’s efforts to defend their country and global security,” said Vasylenko.
Leather is just one of the products that Russian companies have been hoping to acquire from India in the face of western sanctions, with Moscow recently sending a list to India of about 500 goods it was looking to import.
With a growing £16.6bn trade deficit, India is also pushing to export more to Russia. In October, India exported £232m worth of goods to Russia, up 3.7% compared to a year ago, and the Indian foreign minister, Subrahmanyam Jaishankar, said it hoped to double trade in the “foreseeable future”.
Ajay Sahai, the director general of the Federation of Indian Export Organisations, confirmed that Indian exporters were now inundated with requests and queries from Russian businesses that were desperate for the supply of goods, from food products, chemicals and electronics to raw materials and car parts.
“Russia requires almost everything under the sun,” said Sahai. “The west has stopped exporting to Russia, so they are now looking to the Indian market for what they need.”
Sahai said he expected India-Russia trade to increase further in 2023. However, he acknowledged that there were “risks and challenges” involved in trading with Russia and said some bigger Indian exporters were hesitant to do business with Russia over fears they could get caught up in western sanctions.
Rizwan said Homera Tanning had received no pushback for supplying leather goods to Russia, but payments were difficult as very few Indian banks would accept a transfer from Russia and often the payments would bounce.
A shipping line only goes directly from India to Russia once a month, so it often has to send the leather goods through Turkey and Iran in order to reach Russia. “It’s not so easy or convenient as it was,” he said. “There are a lot of obstacles.”
https://www.theguardian.com/world/2022/dec/30/indian-leather-companies-russia-war-effort
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