New draft policy proposes ninety percent local fuel uplift mandate for international carriers

A new draft sustainable aviation fuel policy has proposed that both Indian and foreign scheduled carriers operating international flights must source ninety percent of their fuel locally within the country. This anti-tankering obligation seeks to minimize the practice where aircraft carry excess fuel from other regions to avoid local costs. Alongside this strict sourcing mandate, the draft policy also recommends providing financial and tax support to help stakeholders adopt greener fuel alternatives smoothly. The proposed framework introduces a major shift for airline operators, moving away from a flexible procurement model toward a regulated domestic sourcing requirement.

Previously, international carriers enjoyed complete freedom in choosing where and how much aviation turbine fuel to uplift based on global pricing dynamics. The new mandate aims to build a domestic market for sustainable aviation fuel, though it will directly impact the fuel management strategies of carriers flying out of Indian airports. Aviation finance teams and airline compliance officers should closely monitor the finalization of this draft policy and evaluate its potential impact on operational expenses and supply chain logistics.

Companies need to assess existing fuel supply agreements and watch for upcoming notifications regarding financial incentives, subsidies, or tax reliefs mentioned in the draft. Bottom line: Airlines must prepare for tighter domestic sourcing rules that could reshape operational budgeting and fuel procurement contracts.