Schengen visa for Iceland processed by the Danish embassy
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I read on the VFS website that it's processed by the Danish embassy.
Then both Denmark and Iceland know about this, Just mention your plans correctly and don't worry about who processes what. Tell them I want to visit Iceland. Even if the Schengen visa is issued by Denmark itself, it will be valid for Iceland as well.
And You’re applying at Danish embassy so address the cover letter to them and request a visit to Iceland. Had there been a visa issuing Icelandic mission near you you wouldn’t have to apply somewhere else. So most probably there is no Iceland embassy for you to address anyway.
Iceland is a part of the Schengen Agreement; this for instance secures unrestricted passage for individuals within the Schengen area. Those who enter the Schengen area go through passport control in the first country they arrive in, and then there is no further inspection. It can therefore be said that when a visa is issued for a trip to Iceland, the visa is not issued exclusively for Iceland as it gives access to all other Schengen countries.
In India, the Embassy of Denmark handles visa applications for Iceland through the VFS Global in New Delhi, Chennai, Mumbai,Kolkata and Bengaluru. Information on visas and applications can be found on the websites of the Danish Embassy.
Source: iceland.is
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