The West Midlands UKIP MEP was the only speaker from Britain at the International Economic Forum in Yalta, where delegates included Kremlin supporter Sergey Aksyonov, who Putin made head of the Crimea when it was illegally annexed by Russia in 2014.
The audience also included allies of Syrian president Bashar al-Assad and several high ranking figures from the Russian government and business world.
Mr Etheridge, who is also a Dudley councillor, said he visited the Crimea 'as a representative of the West Midlands'.
He said his aim was to 'build bridges' between the UK and Russia and promote investment opportunities in the Black Country post-Brexit.
British trade involvement there is currently strictly prohibited due to sanctions.
His presence at the event has been criticised by Labour MP Ian Austin, who accused him of peddling conspiracy theories to 'Putin's cronies'.
Mr Etheridge also spoke with reporters from Kremlin-backed television station RT at the conference.
He said there was a lot of 'murky water' in the Skripal case, and that many British people were not convinced that Russia was to blame despite the insistence of the UK Government that it was.
He criticised Britain's recent bombing of Syria, insisting that UK forces should 'stand back' from military intervention and allow the Syrian people 'self-determination'.
Addressing the poisoning of former Russian spy Sergei Skripal and his daughter Yulia, he said there were 'a lot of things that are unexplained' and 'a lot of behaviour that does not ring true'.
The British government and security services needed to explain to the public why they are so convinced that Russia would wish to attack anyone in our country, he said.
Mr Etheridge said that no one had provided any 'solid proof' that Russia was behind the poisoning, and said that Theresa May was taking 'too strong a position' with Russia.
"They should be having a dialogue, they should be having conversation," he said.
He said western intervention in Syria was 'not helpful' and that the UK and US had 'made things worse' by getting involved there in the past.
"As far as I'm concerned, we should stand back from this and allow the Syrian people self-determination," he said.
Mr Etheridge, who said he had 'made a point' of not speaking to any allies of Assad at the event, described his attendance as 'possibly the most important thing I have ever done in politics'.
He told the Express & Star: "I wanted to make it clear to Russia that they don't need to regard Britain as an enemy.
"Everyone over there thinks that the UK is going to attack them. They consider us the vanguard of the war on Russia.
"I don't think they really want to fight with us and we certainly should not be picking a fight with them. The whole thing is being blown out of proportion by nationalistic elements on both sides."
Mr Etheridge spoke in the same room as Winston Churchill, Franklin D Roosevelt and Joseph Stalin met for the Yalta conference in February 1945, which decided Germany's post-war reorganisation.
Dudley North MP Mr Austin said: “Local people elect politicians to stand up for them and for their country.
“But in a month where Russia has poisoned someone on British soil, this man has flown out to a luxury conference organised by Putin's cronies and peddled conspiracy theories.
“It’s very disappointing when we should all be standing up for Britain and our country’s democratic values.”
Mr Etheridge is set to defend his Sedgley seat on Dudley Council in next week's local elections.
As part of his campaign, far right German MEP Beatrix von Storch is due to speak at Sedgley Working Men’s Club on May 1.
Mrs von Storch, who is deputy leader of the Alternative für Deutschland party, recently apologised for falsely blaming a fatal van attack in the German city of Münster on Islamist extremists.
Mr Etheridge said “I am delighted to welcome my friend to Sedgley.
“Beatrix and I served as MEPs together and I know she is a powerful speaker. That she has chosen to support me in her only planned visit to the UK this year is an honour.
“I hope to see a good turnout to hear what she has to say.”