Indian Foreign Minister Salman Khurshid held talks with senior Iraqi officials on Thursday as New Delhi, Baghdad's biggest buyer of oil, pushes for greater energy security as it looks to ensure sustained economic growth.

Khurshid met with his Iraqi counterpart Hoshyar Zebari and Prime Minister Nuri al-Maliki, and was due to speak to Deputy Prime Minister responsible for energy affairs Hussein al-Shahristani, over a range of topics, but securing critical oil supplies for Asia's third largest economy was at the top of the agenda.

"In India's growth story, we need energy security and Iraq is intrinsic to India's strategic positioning for purposes of energy security," Khurshid told AFP on the first visit to Iraq by an Indian foreign minister since 1990.

Asked if ties with Iraq had taken on renewed urgency as India looks to reduce its dependency on oil from Iran, which has been hit by sanctions tied to its controversial nuclear programme, Khurshid replied: "That would be a very Machiavellian and a calculating way of looking at it."

But he acknowledged that "those are all relevant factors".

In a joint news conference with Khurshid, Zebari said "India is the largest buyer of Iraqi oil in the world, and this need is continually increasing."

"The (Iraqi) government reassured the Indian side that Iraq will meet India's demand (for energy), even in future," he added.

Iraq, which currently exports around 2.6 million barrels per day (bpd) of oil, is looking to dramatically boost its energy output in the coming years, with officials aiming for an overall production capacity of 9 million bpd by 2017.

Baghdad is almost entirely dependent on oil sales for income, and while efforts to boost energy production have resulted in a significant increase in output, steps to diversify the country's economy have sputtered.

Iran's oil industry, meanwhile, is struggling to cope with biting international sanctions.

The Islamic Republic has been slapped with successive rounds of UN Security Council sanctions and also unilateral measures by the United States and the European Union.

Tehran's Economy Minister Shamseddin Hosseini said this month that Iran's oil revenue dropped by "50 percent" in the past year and warned that "the situation will not improve in the near future".

Khurshid said his visit also concentrated on boosting trade between India and Iraq, particularly in pharmaceuticals, infrastructure, agriculture and oil exploration.

Whereas firms from the West, Turkey, South Korea and China have sought to win major government contracts in Iraq as Baghdad has looked to restore its conflict-battered infrastructure and dilapidated economy, Indian companies have been noticeably absent.

The minister insisted that would soon change, and that while security was a concern in a country where more than 1,000 people were killed in May, the highest figure since 2008, he argued that "Indian industry is welcomed".

"We have to adjust our conduct to meet local requirements."

Zebari told reporters that while security remained a major problem in Iraq, business were still able to function.

"I am not saying that we live in the ideal city, or ideal situation, in terms of the security risk, but business is doable, it's manageable," he said.

"There are many, many opportunities."

Khurshid's trip to Iraq is the first since then-foreign minister I.K. Gujral visited Baghdad in 1990, according to the Indian foreign ministry.