The Aviation Fuel Terminals Market in India is set to expand steadily over the next decade, driven by rising air travel, increased airport development, and the country’s strategic shift toward sustainability in aviation. According to recent market insights, the industry was valued at US$ 141.2 million in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 2.7%, reaching US$ 189.5 million by 2034.
Growth Drivers: Air Travel and Infrastructure
One of the most significant factors contributing to this growth is the sharp rise in both domestic and international air travel. India’s middle-class population is growing rapidly, making air travel more accessible than ever before. According to ICRA, domestic air passenger traffic is expected to reach 165–170 million in FY2025, with international passenger traffic having already surpassed pre-pandemic levels in 2023.
To support this surge, the Indian government and private players are investing heavily in aviation infrastructure. A projected US$ 11.88 billion is expected to be spent by 2025 on new airport development and modernization of existing facilities. These investments inherently increase demand for reliable and efficient aviation fuel terminals, which serve as a critical node in the aviation fuel supply chain.
Terminal Components and Their Role
An aviation fuel terminal typically includes:
- Tanker berth facilities for fuel unloading,
- Transfer pipelines to storage tanks,
- Fuel storage tanks, and
- Hydrant piping for delivery to aircraft.
A well-functioning fuel terminal ensures uninterrupted flight schedules, whereas insufficient fuel capacity could result in diversions or flight cancellations. Thus, ensuring operational continuity has become paramount for stakeholders, encouraging investments in terminal expansion and modernization.
Trends Transforming the Industry
A unique development in recent years is India’s increasing role as a refueling hub for international flights. Following the fuel crisis in Sri Lanka, South Indian airports such as Cochin, Chennai, and Thiruvananthapuram began facilitating technical landings for refueling. This change has not only improved ATF (aviation turbine fuel) sales in these regions but also reinforced India’s position as a regional fuel logistics hub.
Furthermore, sustainability is emerging as a core focus. The Indian aviation sector is making significant strides toward decarbonization. In 2023, Indian Oil Corporation partnered with LanzaJet Inc. and several domestic airlines to initiate Sustainable Aviation Fuel (SAF) production. SAF, derived from non-petroleum-based feedstocks such as used cooking oil, offers significant reductions in lifecycle carbon emissions.
The Government of India has also been encouraging the use of SAF to align with its broader environmental goals. This growing emphasis on alternative fuels is likely to reshape the fuel supply chain, including the design and operations of aviation fuel terminals.
Technology and Safety in High-Activity Zones
The aviation fuel terminals industry is also witnessing technological enhancements. In 2024, IndianOil Skytanking partnered with Netradyne to deploy the Driver•i fleet safety camera system across airport fueling operations. This AI-based system improves driver awareness and fleet safety in high-traffic zones around aircraft, aligning with DGCA safety regulations.
Additionally, many operators are implementing multi-camera functionality and real-time analytics to reduce risks during fueling operations, ensuring both personnel and aircraft safety.
Key Players and Strategic Moves
Several key players are shaping the aviation fuel terminals market in India. These include:
- Indian Oil Corporation Limited (IOCL)
- Bharat Petroleum Corporation Limited (BPCL)
- Hindustan Petroleum Corporation Limited (HPCL)
- Reliance Industries Limited (RIL)
- Adani Enterprises Limited
- Nayara Energy Limited
- Shell India Markets Private Limited
- Airports Authority of India (AAI)
In February 2024, Cochin International Airport Limited (CIAL) teamed up with BPCL Kochi Refinery to set up a 1,000-kilowatt green hydrogen plant. This project is aimed at powering the airport’s vehicle fleet with clean energy, showcasing a move toward self-reliant and sustainable aviation infrastructure.
Market Segmentation Snapshot
The aviation fuel terminals market in India can be segmented by:
- Terminal Type: FBO, Commercial, Military, Helipad, Others
- Ownership: Government, Private, Joint Venture
- Capacity: Small, Medium, Large-scale
This segmentation highlights the diverse applications and ownership models across India’s growing aviation ecosystem.
Conclusion: Toward a Cleaner, More Connected Future
As India continues to invest in aviation infrastructure, the demand for efficient, safe, and sustainable aviation fuel terminals will continue to rise. The market’s trajectory reflects a broader transformation in how the country views air travel—not just as a convenience, but as a vital economic and environmental asset.
With strong government support, increased private participation, and a focus on alternative fuels and safety, India’s aviation fuel terminals market is well-positioned to play a pivotal role in shaping the future of air travel in the region.
