36Received 08.06.2024. Revised 06.11.2024. Accepted 02.12.2024.
Acknowledgments. The study was carried out with the support of the strategic academic leadership program “Priority 2030”.
Abstract. The article deals with Indian financial organizations facing the risk of secondary sanctions from the Western countries for facilitating Indian-Russian trade. The hypothesis is that Indian organizations are more prone to comply with sanctions if the government isn’t a significant shareholder in them, if they have a large share of foreign investment and if the said organizations are present and active in the sender countries. In the beginning it is stated that financial sanctions or their threat are effective in forcing banks to change their policies, as well as sanctions and their threat against India overall would also be effective as India is a democratic country pursuing friendly policy towards the US. After gathering data on the shareholding patterns and international presence of Indian banks it is found that Indian banks with higher percentage of shares owned by government, lower shares of foreign investments and lower international presence in the sender countries are more used in facilitating India-Russia oil trade and the non-dollar payments mechanism. On the contrary, banks having lesser percentage of shareholding by the government, more shareholders from sender countries and higher presence there prefer to publicly confirm their compliance to the sanctions regime such as adherence to the G7 oil price cap and in some cases they cut ties with Russia. The conclusion made is that while Indian officials reject joining unilateral sanctions against Russia and publicly defend and urge for deeper Indian-Russian trade, Indian banking, playing a significant role in the nation’s economy, won’t deal with Russian entities if it means facing the risk of secondary sanctions. This hampers the ability of India to increase its partnership with Russia and pursue a truly independent foreign policy in accordance with the official rhetorics.
Keywords: financial sanctions, India-Russia cooperation, India-Russia trade, oil price cap, secondary sanctions, government shareholding, private sector, public sector, scheduled commercial banks
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