Tajul Islam

The United States has removed four Indian companies from its sanctions list, reversing restrictions imposed two years ago over their alleged business ties with Russia. The move marks a notable shift in Washington’s sanctions policy toward Indian entities, even as the US continues to tighten economic pressure on Moscow over the Ukraine conflict.

According to the latest update from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), Hyderabad-based RRG Engineering Technologies Private Limited and Lokesh Machines Limited, Ahmedabad-based Galaxy Bearings Ltd, and Delhi-based Shaurya Aeronautics Private Limited have been removed from the Specially Designated Nationals (SDN) List.

The companies were among a broader group of Indian entities sanctioned in 2024. At the time, OFAC imposed restrictions on 21 Indian entities, including 19 companies and two individuals, alleging that they had provided financial, material, technological, or other forms of support to the Russian government.

The sanctions formed part of Washington’s broader strategy to prevent countries and businesses from helping Russia circumvent Western restrictions imposed after the escalation of the Ukraine conflict in 2022.

India, however, has consistently opposed unilateral sanctions that are not authorized by the United Nations. New Delhi has maintained that it does not recognize such measures as legally binding and has repeatedly engaged with the US administration to express its concerns over sanctions targeting Indian businesses.

Industry experts have noted that Indian companies remain particularly exposed to so-called secondary sanctions because India does not have a “blocking statute” similar to those adopted by the European Union, China, or Australia. Such laws are designed to prevent domestic firms from complying with certain foreign sanctions and provide legal protection against extraterritorial enforcement.

Among the firms removed from the sanctions list, Lokesh Machines Limited and Galaxy Bearings Ltd are publicly listed companies with significant international operations.

Lokesh Machines supplies precision engineering products to several global manufacturers, including US-based John Deere and Cummins, Sweden’s Volvo, and Japanese automakers Honda and Suzuki. The lifting of sanctions is expected to ease international business operations and improve investor confidence in the company.

RRG Engineering Technologies also plays an important role in India’s aviation and aerospace sectors. The company’s chairman and managing director, G.M. Ganga Rao, previously served as an industry expert on the Indian Ministry of Civil Aviation’s 2018 task force established to accelerate the development of unmanned aerial vehicle (UAV) technology.

Despite the removal of sanctions on these four firms, tensions over India’s economic ties with countries under Western sanctions remain unresolved.

In May this year, the United States imposed sanctions on another Indian petrochemical trading company over its alleged involvement in oil trade with Iran, underscoring Washington’s continued willingness to target firms it believes are facilitating transactions with sanctioned states.

India’s energy relationship with Russia has remained another major point of contention. Following the outbreak of the Ukraine conflict, India significantly increased purchases of discounted Russian crude oil, arguing that ensuring affordable energy supplies is essential for its national interests and economic stability.

Last August, the United States imposed an additional 25 percent tariff on certain Indian imports as a punitive response to India’s purchases of Russian oil. That tariff has since been withdrawn.

Meanwhile, the European Union is also seeking to expand pressure on Russia through a new sanctions package that reportedly includes several India-based entities. New Delhi has rejected the proposed measures, reiterating that it does not support sanctions lacking United Nations approval and questioning the consistency of European policy, noting that several EU member states continue to import Russian natural gas and liquefied natural gas (LNG).

The US decision to delist the four Indian companies may ease concerns among affected businesses and investors, but it does not signal an end to Washington’s use of sanctions against entities it believes are assisting Russia. The development also highlights the continuing diplomatic balancing act between India and its Western partners as New Delhi seeks to preserve strategic ties with both the United States and Russia while pursuing what it describes as an independent foreign policy guided by national interests.