What is an aviation fuel supply business in India?

It is a B2B service that sources aviation turbine fuel (ATF) from domestic refineries, stores it at airport hubs, and supplies it directly to airlines under long-term contracts. India consumes 3.5 million tonnes of jet fuel annually worth ₹2.8-3.2 lakh crore. Current global disruptions make domestic supply resilience a competitive advantage for airlines.

How much does it cost to start an aviation fuel supply business in India?

₹25-40 crore for MVP setup: Storage infrastructure (₹15-20 crore), logistics fleet (₹5-8 crore), licensing and working capital (₹3-5 crore). A single major airport hub with 2-5 ML capacity is sufficient to begin operations.

Is an aviation fuel supply business profitable in India?

Yes. Margins range from 10-15% on bulk supply (₹5-10 crore per airline contract). With 3-4 airline clients, annual revenue reaches ₹150-300 crore with gross margins of ₹15-45 crore. Current supply volatility makes premium pricing feasible for guaranteed availability.

What regulations apply to aviation fuel supply business in India?

Petroleum Act, 1934 (storage license from Ministry of Petroleum); DGCA approval for on-airport operations; GST at 5% on ATF; CPCB environmental clearance; IS 1593 safety standards for fuel quality; IEC for international sourcing. License approval typically takes 3-6 months.

Domestic Aviation Fuel Supply Business India 2026 Guide

AI SummaryIndia's aviation sector, consuming 3.5 million tonnes of jet fuel annually (₹2.8-3.2 lakh crore market), faces critical supply disruptions from Middle East conflicts. A domestic aviation fuel supply business can capture ₹8,000-12,000 crore annually by aggregating fuel from IOCL, BPCL, and HPCL refineries and supplying airlines under long-term contracts with guaranteed inventory at airport hubs. With ₹25-40 crore startup capital, entrepreneurs can establish storage depots at Delhi and Mumbai airports, secure 3-4 airline contracts (₹50-100 crore each), and generate 10-15% margins. This opportunity suits logistics entrepreneurs, aviation supply chain professionals, and PE-backed infrastructure investors seeking high-margin B2B contracts.