A US Treasury official warned India’s banks yesterday that financial institutions that do business with Russia’s military industrial base risk losing access to the US financial system, according to a letter seen by Reuters.
“We know that the Russian military relies on importing sensitive goods, like machine tools and microelectronics, and it looks to foreign financial institutions to facilitate these transactions,” deputy treasury secretary Wally Adeyemo said in the letter to the Indian Banks’ Association.
While the letter does not identify a particular concern about India’s banks, New Delhi has resisted pressure to distance itself from Moscow since Russia invaded Ukraine in 2022 and, after Prime Minister Narendra Modi met Russian President Vladimir Putin this month, said it is exploring ways to boost its exports to Russia.
The letter follows an executive order US President Joe Biden issued in December authorising sanctions against foreign financial institutions that conduct business with Russia’s military industrial base, Adeyemo said, and Treasury’s recent, expansive interpretation of who is part of Russia’s military industrial base.
The Indian Banks’ Association could not immediately be reached for comment.
The US is eager to further strengthen its economic relationship with India, Adeyemo also said. Trade between the two countries increased by over 110 per cent in a decade, he wrote, and they remain among each other’s largest trading partners.
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