India in talks with Russia on mega deal for long-term import of crude oil

India and Russia have finalised the broad contours of an ambitious government-to-government agreement for long-term import of crude oil by India from Russia's Far East region.

The pact is likely to be inked during Russian President Vladimir Putin's visit in October for the annual summit talks with Prime Minister Narendra Modi, diplomatic sources told PTI.

The pact is set to help the two countries achieve their target of taking the volume of annual bilateral trade to USD 25 billion from current USD 11 billion.

When asked about it, Russian Deputy Chief of Mission Roman Babushkin told PTI that both India and Russia are adopting a "multi-dimensional" approach in boosting cooperation in oil and gas sector in sync with decisions taken by Putin and Modi in their last annual summit in Vladivostok in September.

"We have signed an important contract few days back for supply of two million tones of oil to India from Russia by end of the current year. We are also considering to sign a long-term contract for supply of oil (to India) for many years," Babushkin said,

"We should realise our potential as reliable partners in energy sector. Another area would be the mutual investment cooperation in the energy sector in India and Russia," Babushkin said.

He said Indian oil and gas companies are positively considering to participate in exploration of oil and gas in Russia's Far East region.

India meets more than 80 per cent of its oil needs through imports. It has been scouting new markets for import of oil after the US in May last year ended exemptions it had granted to India and several other countries to buy oil from Iran.

After summit talks between Modi and Putin in September, India and Russia finalised a roadmap for cooperation in the hydrocarbons sector and decided to explore joint development of oil and gas fields in both countries.

At present the volume of bilateral trade between India and Russia is USD 11 billion. Both the countries have set a target of enhancing it to USD 30 billion by 2025.

India's ties with Russia have largely driven by close cooperation in defence and civil nuclear energy sectors. But the two countries in the last few years have focused on expanding the cooperation to oil and gas sectors.