The Main Directorate of Intelligence of Ukraine reported the presence of “Made in India” electronic components inside Shahed‑136 drones used by Russian forces on their social media platforms in April 2025. The electronic components were a “bridge rectifier E300359” found in Shahed’s voltage regulator unit, assembled in India and exported by Vishay Intertechnology, and a “signal‑generator chip” found in Shahed’s jammer-proof antenna for the drone’s satellite navigation system, exported by Aura Semiconductor. Thereafter, it was reported that on August 5, 2025, the Ukrainian government approached the Ministry of External Affairs, India, regarding this issue.

See the link for the news reports below:
https://www.hindustantimes.com/india-news/ukraine-flags-indian-made-parts-in-drones-used-byrussian-forces-101754335825281.html
https://kyivindependent.com/indian-component-found-in-russian-weapon-for-first-time-hur-says/

It is unclear from the information publicly available where these exports were directed, how these products ended up in Russia to be used in military hardware against Ukraine, and whether the companies procured the relevant licenses for their export. However, this scenario is a cautionary tale- how lawful, well-intended exports can find their way into conflicts unless systemic checks are deepened. As India accelerates its “Make in India” drive, especially in defence and other sensitive sectors, and steps up global exports, ensuring these products are used responsibly is a strategic imperative.

Taking cognizance of this, one must apprise themselves of India’s existing export control licensing framework encapsulated in the Foreign Trade (Development & Regulation) Act, 1992, the Foreign Trade Policy issued thereunder, and the Weapons of Mass Destruction Act, 2005, which provides for the regulation of dual-use, and military items via the controlled Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) List. The “Catch-all” provision under these laws mandates an export license for the export of an item not listed in the SCOMET list, if the exporter is aware, or has been informed by the Directorate General of Foreign Trade (DGFT), that such item may be used in a military application or in connection with weapons of mass destruction (WMD) or their delivery systems.

As of 2025, the DGFT has encouraged exporters to implement Internal Compliance Programs (ICPs) by incentivizing them with increased efficiency and speed in license procurement and exports under general authorization schemes. Voluntary self-disclosure provisions have also been strengthened to encourage transparency and mitigate penalties. However, despite these measures, the Ukraine incident has exposed several vulnerabilities:

• Awareness deficit: Many component manufacturers may lack training or systems to flag high-risk destinations or monitor supply chains deeply. This is especially so in the case of MSMEs whose focus is on scaling operations over spending on operational integrity.
• Absence of Internal Compliance Programs (ICPs): Most Indian companies lack internal mechanisms to screen transactions, maintain export records, or identify red flags indicating potential misuse. In this scenario, exporters often fail to conduct due diligence on the end-use or final destination of their products, making diversion to unintended users more likely.
• End-use blind spot: Once exported legitimately to third parties abroad, tracing items, especially plug-and-use items such as the signal‑generator chip exported by Aura Semiconductor, becomes nearly impossible, especially without an effective export control framework.
• Exploitation of Loopholes via Transshipment or Re-Export: Goods exported to third countries with weaker export control regimes may be diverted to high-risk destinations, exploiting a lack of end-to-end tracking for several companies from India.
• Inefficient record-keeping practices: Many exporters do not maintain sufficient documentation on export transactions, end-use certifications, or post-shipment tracking, making it difficult to trace accountability when diversion occurs. It is usually after an incident occurs that audits are conducted, and exports are traced to locate the point of diversion.

These gaps undermine Indian companies’ credibility and expose them to reputational risks. However, the root cause for all of the above is a prevailing reluctance among companies to invest in compliance systems, export classification tools, due diligence procedures, or legal expertise. Compliance is often viewed as a cost rather than a risk mitigation strategy, leading to superficial or box-ticking approaches. This attitude increases the likelihood of violations, albeit inadvertent.

The question, therefore, arises:

What is the solution? India has an export control legislative framework complying with its obligations under the multilateral export control regimes, namely, the Missile Technology Control Regime, the Wassenaar Arrangement, and the Australia Group, and adhering to the requirements of the Nuclear Supplier Group. Hence, the law itself does not require any significant modification.

However, better implementation by the Government and the industry is paramount. It is essential to broaden compliance culture in the industry, where all companies dealing with dual-use technologies adopt effective and efficient compliance systems, including risk assessment, recordkeeping, post-export audits, and end-user verification for sensitive components—even those classified as civilian or commercial.

The Government needs to heighten its awareness program, introducing more frequent industry-wide outreach events, especially targeting MSMEs, start-ups, and electronics manufacturers, to deepen understanding of high-risk diversion risks. Sector-specific toolkits can be made available on the Government websites, and Regional DGFT offices should be formally designated and equipped to function as local export control support hubs for MSMEs to assist with cost-effective compliance. Alternatively, Export Control Facilitation Centres may be set up in tandem with sensitive sector corporate leaders, associations and other similar bodies.

Enforcement actions taken for export control violations must be publicized in an anonymous manner, including details of case studies, fines imposed, or licenses revoked, to help raise awareness of the consequences of non-compliance and underscore the importance of responsible, supervised, and law-abiding trade practices. Both the Industry and the Government must leverage technology for enhancing supply chain visibility and employ real-time tools to screen sanctioned and/ or high-risk buyers and/ or countries.

For India to remain a trusted and relevant player in global trade, the robust implementation of a transparent and enforceable export control framework is the need of the hour. The above measures are practices that can build industry credibility and help overcome the lack of export control compliance structures.