Russian oil company Rosneft is to start supplying crude oil and oil products to refineries in India operated by Essar.
The Indian oil and gas company has signed an agreement with Rosneft on the key terms of supplies. Deliveries may begin in 2015, the two companies announced.
Financial details of the deal were not disclosed.
As a result of this long-term arrangement, Essar will benefit from stable new supplies to its refining facilities. Rosneft, meanwhile, will gain a secure market outlet for its oil and oil products.
The agreement also opens up new possibilities for cooperation between the two countries, thanks to the synergistic potential of the partnership in upstream and downstream sectors, Rosneft said.
According to Igor Sechin, head of the Russian company, the strategic potential of the new agreement "can hardly be overestimated."
"The performance of the terms of the agreement will have a substantial impact on the scale of economical cooperation between Russia and India and will fuel significant growth in the goods turnover between two countries," Sechin claimed.
"For our Indian partners the signing of this agreement represents a vital element of basic supplies diversification which, at the same time, will ensure energy security for the country. The Russian counterpart, in turn, will get the possibility of production and supplies volume planning to a new region with considerable growth potential," he added.