Analysis | How Russia Rewired Its Space Ecosystem After Ukraine, and What It Means for the West?
- Omkar Nikam
- Nov 28, 2025
- 6 min read
by Omkar NIKAM
A deep forensic look at how Russia rebuilt its space-industrial base through hidden intermediaries, new regional clusters, and shadow supply chains after the Ukraine war.
Russia’s space-industrial base has undergone a dramatic, forced restructuring since the February 2022 invasion of Ukraine. Sanctions from the United States, European Union, United Kingdom, and aligned partners have severed access to Western microelectronics, materials, satellite components, insurance markets, and launch customers that once quietly underpinned much of Russia’s space activity. What followed was not collapse, but a rapid, state-driven rewiring of industrial inputs, supply routes, and ecosystem actors.
Today, Russia’s space sector operates in a hybrid state: structurally weaker than before the war, but highly adaptive, increasingly opaque, and surprisingly diversified in procurement routes. For Western governments and companies, this evolving landscape is not merely a sanctions-enforcement concern; it is a window into the geopolitical and technological realities shaping the future of dual-use space capabilities.
In this analysis, I map out the actual winners, losers, intermediaries, and shadow actors powering Russia’s post-2022 space machine, and offer a forward-leaning perspective on where new vulnerabilities and opportunities for pressure now exist.
1. The Core Narrative: Russia’s Systemic Rewiring of Its Space Industrial Base
Before 2022, Russia’s space sector was already in decline: aging infrastructure, shrinking budgets, and loss of commercial launch market share to SpaceX had eroded competitiveness. After 2022, sanctions introduced a new structural shock, forcing Roscosmos to overhaul its sourcing, production, and R&D pipelines.
Russia’s response can be summarized in three moves:
Internal consolidation of all major space enterprises under tighter state and defense control
Reconstruction of external supply routes through China, the South Caucasus, Central Asia, and a network of private “shadow importers.”
Aggressive substitution of Western electronics with Chinese equivalents and bootleg components procured via intermediaries
These measures have kept manufacturing alive, not at peak efficiency, but sufficiently to sustain national military-space programs, including GLONASS modernization, EO satellites, and defense reconnaissance assets.
2. Winners and Losers in Russia’s Restructured Space Ecosystem
2.1 Industrial Winners
Several state and private players have strengthened their position as Russia reorients toward a sanctions-adapted supply chain.
Major Winners
Why These Actors Won
Because sanctions forced Moscow to prioritize resilience over efficiency. The winners were those connected to defense procurement strategies or with privileged access to state-backed import routes. The “grey” procurement class, often small private logistics firms, emerged as a surprising backbone of Russia’s space electronics flow.
2.2 Industrial Losers
By contrast, several historically important institutions have lost relevance or operational capacity.
Many engineering teams now operate in “survival mode,” repurposed from commercial innovation to state-driven production quotas.
3. Russia’s New Industrial Clusters: Geography of a Sanctions-Adapted Economy
Despite the rhetoric of “full import substitution,” Russia’s industrial reality is more complex. Several clusters have emerged as the core of the rewired system.
3.1 Krasnoyarsk: Russia’s Satellite Workhorse
ISS Reshetnev, producer of GLONASS satellites and communications platforms, became the centre of Russia’s satellite resilience strategy. This cluster has:
Expanded domestic PCB manufacturing
Developed new contracts with Chinese electronics firms
Built a defense-oriented supply priority allowing GLONASS-K2 satellites to proceed despite sanctions
Krasnoyarsk is now one of the few regions where space-sector employment has increased since 2022.
3.2 Moscow Region: Command, Control, Space Electronics
The Moscow region houses major R&D players and integrators, including:
While hit hardest by electronics sanctions, Moscow has benefitted from clandestine import schemes routed through China and the Caucasus, enabling continuity of EO and intelligence satellite programs.
3.3 Tatarstan & Bashkortostan: UAV and Small-Satellite Manufacturing
These regions have quietly become hubs for small satellites and UAV-compatible subsystems. State governments here actively support:
Satellite component machining
UAV electronics manufacturing
Dual-use propulsion and telemetry
The regional strategy mirrors China’s provincial innovation model: empower local suppliers to fill national-level capability gaps.
3.4 The Emerging Caucasus–Central Asia Routing Corridor
A new “transit corridor” enabling sanction evasion has rapidly taken shape:
This region is now critical for monitoring sanction-breach pathways.
4. The Rise of Shadow Suppliers: Russia’s “Third-Country Electronics Ecosystem”
Perhaps the most consequential development is the rise of a new class of unofficial suppliers, small private companies facilitating the flow of restricted components.
These actors typically operate across:
Armenia (company registration + re-export)
Kazakhstan (logistics + customs warping)
Kyrgyzstan (high-volume chip flows)
UAE (finance + company masking)
Hong Kong (electronics trading, high anonymity)
Why Shadow Suppliers Matter
Because Russia’s military-space programs depend on Western microelectronics, particularly:
Analog-to-digital converters
Radiation-hardened FPGAs
High-performance processors
Power components
Many intercepted shipments show Western-origin semiconductors, often from Texas Instruments, Microchip Technology, Analog Devices, moving through Central Asian intermediaries.
Russia’s narrative of “full import substitution” is a strategic illusion. The real system is a hybrid built on opaque intermediaries.
5. What Russia Is Actually Building Now: A Sector-by-Sector Breakdown
Below is a realistic snapshot of who is producing what in today’s Russian space ecosystem.
5.1 Navigation: GLONASS Modernization Continues
Despite sanctions, production of GLONASS-K2 satellites, critical for military precision, continues at ISS Reshetnev. China-sourced FPGAs and boards appear to be sustaining assembly.
5.2 Earth Observation (EO): Accelerated Military Focus
NPO Lavochkin and defense-aligned manufacturers are increasing output of:
Military EO satellites
Radar reconnaissance platforms
Dual-use weather and resource-monitoring satellites
Russia is effectively pivoting EO toward intelligence and battlefield awareness.
5.3 Communications: Domestic Production + Foreign Leasing
While Russia builds domestic comsats, it also leases foreign capacity, particularly from China, at a level rarely acknowledged by Moscow.
This dual-path approach reflects strategic necessity.
5.4 Launch Vehicles: Decline Hidden by State Support
Sanctions crippled commercial launch demand, but the state continues to fund:
Soyuz
Angara
Small launchers in development (though delayed)
Russia maintains capability, but competitiveness has evaporated.
5.5 Small Satellites: Regional Empowerment
Smallsat production is rising in Kazan, Ufa, and Moscow, driven by:
UAV payload needs
Military quick-turn manufacturing
Educational satellites repurposed for defense training
Russia is mimicking the rapid-production logic popularized by Western smallsat companies like Planet and ICEYE, but with defense-first priorities.
6. Strategic Implications for Western Governments and Industry
From a Western perspective, the post-war Russian space ecosystem is both more fragile and more difficult to pressure than before.
6.1 Identifying New Chokepoints
Chokepoints now lie not in Russia but in its intermediaries:
Sanctioning Russia alone is no longer sufficient.
6.2 What Western Actors Get Wrong
Many assume Russia is running out of chips. In reality:
Russia still acquires Western-origin microchips
China has stepped up with mid-grade substitutes
Shadow logistics networks are expanding, not shrinking
The key gap is not chips, but Russia’s inability to regain commercial space relevance.
6.3 Where Western Industry Can Gain Advantage
Opportunities include:
Monitoring and disrupting the intermediaries rather than Russia directly
Strengthening EO monitoring of logistics nodes like Almaty, Yerevan, and Dubai
Leveraging Western commercial innovation, where Russia cannot compete, especially in:
satellite manufacturing automation
high-cadence launch services
AI-enabled ISR processing
Supporting emerging Eurasian governments in resisting sanction-breach pressures
Russia’s space sector will remain militarily functional but commercially stagnant.
7. My Strategic View: Russia’s New Space Economy Is Built on Borrowed Time
Russia’s post-Ukraine war space ecosystem is not a renaissance. It is a workaround, impressive in its resilience, highly adaptive, but ultimately unsustainable without external inputs. Sanctions have not collapsed the sector, but they have locked it into:
Greater dependence on China
Higher procurement costs
Lower reliability
Longer development cycles
Reduced civilian innovation
The system works today because intermediaries work today. Should China shift its position, or if Central Asian states face coordinated Western pressure, Russia’s space sector would face a true reckoning.
For Western stakeholders, the strategic opportunity lies in understanding that this is not a self-sufficient machine. It is a dependency network. And dependency networks can be influenced, pressured, and reshaped.
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About Author
Omkar NIKAM, Founder & CEO, Access Hub
Omkar is a consultant, analyst, and entrepreneur with over a decade of experience advising governments, space firms, defense agencies, aerospace, maritime, and media technology companies worldwide. At Access Hub, he shapes the vision, strategy, and global partnerships, positioning the platform at the crossroads of innovation and business growth.
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