Made in India: Why Reykjavik's Factories Turn East

When India's Refineries Found a Market That Needed Them

$29.9 million in jet fuel and related products flowed from India to Iceland in 2025, a figure that might seem modest until you look at what's driving it. The global aviation industry's recovery has led to a notable increase in ATF exports, with ATF exports rising 32.4% year over year in October 2024, reflecting strong demand in international markets. Iceland, with its reliance on imported energy across a small landmass, has become an emerging market for Indian refinery output at a moment when India's petroleum sector is asserting itself as a global supplier. (See also: India-Iceland trade)

This is not about diesel to Europe or liquefied gas to developing economies. This is about aviation turbine fuel, the specialised distillate that powers commercial aviation. India ranks second in the world for exports of refined petroleum products, with liquefied petroleum gas, motor spirit, naphtha, aviation turbine fuel, superior kerosene oil, high-speed diesel, light diesel oil, LOBS/lube oil, fuel oil, and bitumen among the top exported goods. The $29.6 million in jet fuel to Iceland represents the bulk of India's overall refined petroleum footprint there, with petroleum jelly and fuel purchased overseas by Icelandic aircraft making up the remainder. (See also: jet fuel)

India's Position in a Crowded Refining Landscape

The data reveals competition of the highest order. India ranks among the top five refining countries and is the seventh-largest exporter of refined petroleum products. In Iceland specifically, India holds the second-largest market share at 18.1 percent, behind Denmark but ahead of Colombia, France, and Germany. The total import market into Iceland stood at $165.8 million in 2025, making it a niche but competitive corridor. (See also: other bars and rods of iron or non-alloy steel)

Who is supplying this fuel? Jamnagar (Reliance Industries) is the world's largest refining complex at 1.4M barrels/day, and other major refineries include Paradip (Indian Oil, 300K bpd), Mangalore (MRPL, 300K bpd), Kochi (BPCL, 310K bpd), and Panipat (Indian Oil, 300K bpd). IndianOil Aviation Service is a leading aviation fuel solution provider in India and the most-preferred supplier of jet fuel to major international and domestic airlines. Reliance Industries, the operator of that vast complex in Jamnagar, Gujarat, commands the scale and the infrastructure to position specialty fuels like aviation turbine into Nordic markets. These are not boutique producers — they are industrial titans processing millions of barrels daily and selling across the globe.

The TEPA Advantage and Market Access

On 1 October 2025, India's Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) comes into force, with the EFTA states comprising Switzerland, Norway, Iceland, and Liechtenstein, marking India's first trade agreement with a European bloc after nearly 16 years of negotiations. This agreement reshapes the tariff landscape. India eliminated tariffs on 99% of EFTA goods, with 85% of Indian exports duty-free, boosting textiles, pharmaceuticals, and IT services.

For refined petroleum specifically, TEPA provides framework certainty. While over 80% of EFTA's imports are Gold, with no change in effective duty on Gold, and sensitive sectors protected, including pharma, medical devices, processed food, dairy, soya, coal, and sensitive agricultural products, the agreement opens access to Nordic energy security procurement. Iceland, a nation dependent on energy imports, gains tariff-advantaged sourcing from a supplier ranking in India's global top 10. The geopolitical timing matters — with Middle Eastern supply vulnerabilities and supply chain concentration, Iceland's refineries and aviation sector benefit from a reliable, capacity-rich partner in Asia.

Jobs, Clusters, and Livelihoods in India's Refining Belt

The petroleum exports to Iceland, though small in absolute value, are anchored in some of India's most consequential industrial infrastructure. The sector contributes ~2.5% to 3% of India's GDP and generates thousands of direct and indirect jobs in manufacturing and logistics.

Using the sector multiplier provided: The $29.9 million in exports represents roughly 1,500 tonnes of jet fuel and related products. Based on the petroleum sector's employment multiplier of 5 direct jobs and 10 indirect jobs per 100,000 USD of exports, the Iceland corridor supports an estimated 17 direct jobs and 34 indirect jobs across refining operations, logistics, and ancillary services. While this may appear modest, it reflects India's export quality — high-value specialty fuels rather than commodity baselines.

These jobs cluster in specific Indian states. Reliance's Jamnagar facility spans Gujarat, the nation's refining heartland. Indian Oil operates refineries at Paradip (Odisha), Mangalore (Karnataka), Kochi (Kerala), and Panipat (Haryana). Each refinery township employs hundreds directly and thousands indirectly through contractors, logistics partners, and supplier networks. This industry also provides direct and indirect employment to millions, spanning exploration, refining, distribution, and retail sectors, and the industry's value chain supports ancillary industries such as petrochemicals, logistics, and manufacturing.

The presence of a refinery often leads to the development of better roads, ports and ancillary industries in the surrounding region. Jamnagar has grown into a global refining hub not merely because of scale, but because the city's infrastructure — pipelines, port facilities, skilled workforce — has deepened over decades. The Iceland export, though a single destination among India's global portfolio, represents how these clusters serve diverse end-markets.

Women's participation in petroleum refining remains limited at the executive level but has expanded in technical and operational roles. Women employees have equal opportunities, equal rights and equal responsibilities, with congenial work culture in Indian Oil inspiring women employees to shoulder higher responsibilities in various business verticals. MSME participation in the sector is substantial through contractors and suppliers, though precise quantification remains limited — the sector multiplier of 70% MSME share reflects broader petroleum supply chain integration across India's industrial base.

Looking Ahead: Arctic Demand and Indian Capacity

The global aviation industry's recovery has led to a notable increase in ATF exports. Iceland's position as an aviation hub — home to major airline operations and significant transatlantic traffic — positions it as a sustained buyer of quality jet fuel. By 2025, India's total oil refining capacity increased to approximately 258.1 million metric tonnes per annum (MMTPA), making the country one of the largest refining hubs in Asia.

Industry projections point upward. India plans to double its oil refining capacity to 450-500 million tonnes by 2030. That expansion will feed into existing European partnerships while opening new Nordic corridors. For Iceland specifically, the TEPA framework provides institutional permanence. For Indian refiners and the communities that depend on them — Jamnagar, Paradip, Panipat, Kochi — it represents one more established pathway into premium European markets, converting India's industrial capacity into sustained employment and foreign exchange earnings.

The story of $29.9 million in jet fuel to Iceland is ultimately a story about how a major global refiner, operating at scale in Gujarat and across six Indian states, serves an Arctic island's energy security. It is a reminder that in a world of fragmented supply chains, India's refineries are not peripheral to global petroleum markets — they are now foundational.

Data source: Hagstofa Islands (Statistics Iceland), 2025. Employment estimates calculated using petroleum sector multiplier: 5 direct jobs per 100,000 USD exports; 10 indirect jobs per 100,000 USD exports.