The Indian aviation industry is undergoing a transformative phase, propelled by rising passenger traffic, government infrastructure investments, and a strong push toward sustainability. At the heart of this aviation revolution lies a critical yet often overlooked component—aviation fuel terminals.
Market Overview
In 2023, the aviation fuel terminals market in India was valued at US$ 141.2 million. According to recent projections, the market is expected to grow at a compound annual growth rate (CAGR) of 2.7% from 2024 to 2034, reaching a valuation of US$ 189.5 million by the end of the forecast period.
This growth trajectory is tightly interlinked with the rise in both domestic and international air travel and strategic investments in airport infrastructure. The development of efficient aviation fuel terminals is essential to meet India’s growing aviation fuel demands and ensure uninterrupted operations across airports.
Analysts’ Viewpoint
According to market analysts, two key factors are propelling the aviation fuel terminals market forward in India:
- The surge in air travel, driven by the expanding middle class
- The rise in investment in aviation infrastructure, both public and private
India’s domestic air traffic is forecast to touch 165–170 million passengers in FY2025, marking a continued recovery and growth trend post-pandemic. Simultaneously, international travel is rebounding with Indian carriers surpassing pre-COVID levels in FY2023.
This rapid expansion of passenger volume necessitates a reliable and scalable aviation fuel supply network. Hence, airport fuel terminals are becoming vital for maintaining flight schedules and minimizing operational disruptions.
Strategic Infrastructure Investments
The Indian government has committed an investment of US$ 11.88 billion by 2025 to expand and modernize airport infrastructure. Private enterprises are also actively contributing, particularly through public-private partnerships aimed at improving regional connectivity.
One notable example is the February 2024 MoU between Air India, Tata Advanced Systems Limited (TASL), and the Government of Karnataka, targeting aviation R&D and manufacturing in the state. These moves directly contribute to the demand for aviation fuel terminals and supporting infrastructure.
Market Trends and Technical Landings
With the Sri Lankan fuel crisis serving as a backdrop, Indian airports, especially in South India, have become strategic refueling hubs. Airports in Cochin, Chennai, and Thiruvananthapuram are now offering technical landings for international aircraft. Cochin International Airport began facilitating such services in 2022, significantly increasing aviation turbine fuel (ATF) throughput and bolstering its relevance in the global aviation fuel map.
This growing trend of technical refueling not only enhances revenue for Indian airports but also boosts the demand for modern, scalable fuel terminals that can handle high turnaround times and increased traffic volumes.
The Rise of Sustainable Aviation Fuel (SAF)
A major shift in India’s aviation fuel terminal landscape is the focus on sustainability. Key stakeholders are embracing Sustainable Aviation Fuel (SAF) to support decarbonization goals. In 2023, Indian Oil Corporation (IOCL) partnered with LanzaJet Inc. and multiple airlines to produce SAF locally, aiming to reduce the lifecycle carbon emissions of aviation fuel.
SAF, derived from renewable feedstocks such as used cooking oil and animal fats, is being increasingly promoted by the Indian government. Terminals must now adapt to accommodate SAF storage, blending, and distribution systems, presenting both a challenge and an opportunity for operators.
Technology & Safety Innovations
To manage the complexity of high-activity fueling zones at airports, companies are adopting advanced fleet safety and analytics solutions. A recent development in February 2024 saw Netradyne collaborate with IndianOil Skytanking, introducing Driver•i, a camera-based AI safety system that enhances visibility and mitigates refueling risks.
In parallel, Cochin International Airport Limited (CIAL) has partnered with BPCL Kochi Refinery to establish a 1000-kilowatt green hydrogen plant on airport grounds. The generated fuel will power CIAL’s ground vehicles, marking a significant step toward clean airport operations.
Competitive Landscape
The Indian aviation fuel terminals market is dominated by several major players:
- Indian Oil Corporation Limited (IOCL)
- Bharat Petroleum Corporation Limited (BPCL)
- Hindustan Petroleum Corporation Limited (HPCL)
- Reliance Industries Limited (RIL)
- Adani Enterprises Limited
- Essar Oil Limited
- Nayara Energy Limited
- Shell India Markets Private Limited
- GMR Hyderabad Aviation SEZ Limited
- Airports Authority of India (AAI)
These companies are focused on expanding terminal capacity, enhancing safety compliance, and aligning operations with sustainability goals.
Conclusion
India’s aviation fuel terminals market is set for steady growth through 2034. As air traffic volumes rise and government-private partnerships push infrastructure development, aviation fuel terminals are becoming indispensable in maintaining airport operational efficiency. The incorporation of SAF, AI-powered safety tools, and green energy projects highlight a progressive shift toward a sustainable and technologically advanced aviation ecosystem in India.
Investors, policymakers, and stakeholders must view aviation fuel terminals not just as logistical endpoints but as strategic enablers of India’s burgeoning aviation ambitions.
