Russia has put its military bases on high alert in the South Caucasus country and withdrawn most of its diplomats since Georgian authorities arrested Russian officers they accused of spying last week.
"The board of directors made the decision to advise the company's management to stop buying spare parts for locomotives in Georgia," RZD President Vladimir Yakunin said.
He said RZD has been planning to buy spare parts for locomotives in Georgia worth about 100 million rubles ($3.7 million), adding the purchase was intended to support Georgian enterprises.
"Given the situation that has developed, the board of directors made the decision to advise the company's management to follow market principles and to place orders on more profitable terms with Russian enterprises, which is what the company will do," he said.
The latest diplomatic clash between Russia and Georgia has further aggravated relations between the two countries, which have been volatile in recent years partly as a result of Russia's involvement in Georgia's breakaway republics of Abkhazia and South Ossetia, where Russian peacekeeping forces have been stationed since bloody conflicts in the early 1990s.
