Nestled in the Andheri district of Mumbai, Shreya Life Sciences has emerged as an unexpected facilitator of high-tech exports to Russia, even as the country faces stringent sanctions from the West. A recent investigation by Bloomberg has unveiled that this mid-sized pharmaceutical company is actively involved in exporting advanced technology, particularly Nvidia chips, to Russia, raising eyebrows about India’s growing role in supporting Moscow’s technological needs.
The Nature of Exports
From April to August 2024, Shreya Life Sciences shipped over 1,000 Dell PowerEdge XE9680 servers, each embedded with Nvidia’s H100 processors designed for artificial intelligence applications. These shipments, valued at approximately $300 million, fall under categories of technology that the U.S. and the European Union have deemed restricted due to their potential dual-use in military applications. Nevertheless, Shreya’s exports comply with Indian regulations, which do not mirror the sanctions imposed by Western nations.
India’s Evolving Role in Technology Supply
India has increasingly become a significant hub for transshipping restricted technology to Russia. Reports indicate that it is now the second-largest supplier of such technologies after China. This development has drawn the ire of Western governments, particularly Ukrainian officials, who argue that such trade undermines efforts to curb Russia’s military capabilities. India’s long-standing relationship with Russia, especially in defense and energy, further complicates its position. While Indian officials maintain neutrality in the Russia-Ukraine conflict, they have continued to increase crude oil imports from Russia, benefiting from discounted prices.
Malaysian Connections and Regional Trade Dynamics
Interestingly, while India serves as the primary transit point, documents reveal that Malaysia is often the original source of the technology. Recent shipping records indicate that a significant portion of the servers exported to Russia originated in Malaysia. During a September visit to Russia, Malaysian Prime Minister Anwar Ibrahim emphasized the potential for enhancing trade relations, including advanced technologies.
Despite inquiries, Malaysia’s authorities have not commented on these transactions. Meanwhile, Dell has confirmed that it ceased operations in Russia following the 2022 invasion of Ukraine and remains committed to complying with international sanctions.
Western Concerns and Diplomatic Pressure
Shreya’s growing role in supplying technology to Russia has prompted U.S. and EU officials to engage with India diplomatically, urging it to reconsider these shipments. Recently, U.S. Deputy Treasury Secretary Wally Adeyemo issued a warning to Indian industry leaders, highlighting the risks of sanctions for companies dealing with Russia’s military sector. Despite these pressures, India appears to be unmoved, managing concerns on a case-by-case basis.
Shreya Life Sciences: From Pharmaceuticals to High-Tech Exports
Founded in Moscow in 1995 by Sujit Kumar Singh, Shreya Life Sciences initially focused on pharmaceutical distribution before expanding into manufacturing. Over the years, it has diversified its operations, and in recent years, it began exporting high-tech hardware alongside its traditional pharmaceutical products. Between January 2022 and August 2024, the company reported $22 million in pharmaceutical exports to Russia.
However, its heavy reliance on the Russian market has exposed it to economic challenges, especially during sanction-related downturns. In 2014-15, following the annexation of Crimea, Shreya experienced a significant revenue drop due to the collapsing ruble, leading to substantial financial difficulties.
Financial Support from Promsvyazbank
To stabilize its operations, Shreya has relied on support from Promsvyazbank, a state-owned institution crucial to Russia’s defense industry. Between 2011 and 2013, the bank provided $86 million in loans, which helped sustain Shreya’s operations amid international sanctions. As of 2022-23, a staggering 85% of Shreya’s borrowings were owed to Promsvyazbank, underscoring the bank’s pivotal role in the company’s financial health.
