In this guide
The Incoterm in your quotation decides who pays for transport, insurance and customs, and the exact point where risk passes from seller to buyer. Two quotes for the same product can look very different simply because they use different Incoterms. Here is a practical guide to the Incoterms 2020 rules you'll meet when importing from India.
At a glance
| Term | Seller delivers… | Main freight paid by | Risk passes |
|---|---|---|---|
| EXW | At their factory, not loaded | Buyer | At seller's premises |
| FCA | To your carrier at a named place | Buyer | On handover to carrier |
| FOB | Loaded on board the vessel at the Indian port | Buyer | On board at origin port |
| CFR | On board, with freight paid to your port | Seller | On board at origin port |
| CIF | As CFR, plus seller buys insurance | Seller | On board at origin port |
| DAP | At your named destination, not unloaded | Seller | At destination |
| DDP | At destination, import duties paid | Seller | At destination |
FOB, CFR and CIF are for sea and inland waterway transport only. For containers and air freight, FCA, CPT, CIP and DAP are often more precise.
EXW: lowest price, most work for you
The seller only makes the goods available at the factory. You are responsible for loading, Indian export clearance and everything after. In practice, foreign buyers often struggle to handle Indian export formalities themselves, so EXW is rarely the best choice unless your forwarder has a strong Indian presence.
FOB: the most common choice
The Indian supplier handles inland transport and export customs clearance and loads the goods on the vessel, for example at Nhava Sheva (JNPT), Mundra or Chennai. You nominate your freight forwarder and pay ocean freight. FOB gives you control over freight rates and the shipping line while the supplier handles Indian formalities.
CFR and CIF: convenient, but check the details
The seller arranges and pays freight to your port, and with CIF also buys insurance. Note that the risk still passes at the Indian port of loading. Under Incoterms 2020, CIF only requires minimum insurance cover (Institute Cargo Clauses C), so ask for broader cover if you need it. Destination charges such as terminal handling and delivery order fees are usually yours.
DAP and DDP: delivered to your door
Under DAP the seller delivers to your named place, and you handle import clearance and duties. Under DDP the seller also pays import duties and taxes, which is simple for you but requires the seller to be able to clear goods in your country. Quotes will include margin for that.
Which Incoterm should you choose?
- You have a freight forwarder: FOB or FCA usually gives the best control and transparency.
- You want simplicity for small or first orders: CIF or CFR to your port, or DAP to your warehouse.
- Comparing suppliers: make sure every quote uses the same Incoterm and named place, otherwise you are not comparing like with like.
Typical export documents from India
Commercial invoice, packing list, bill of lading or airway bill, and certificate of origin. Depending on product and destination, also test certificates, fumigation certificates for wooden pallets, and an insurance certificate under CIF or CIP. We coordinate these with the manufacturer and your forwarder. See our process or services.
Frequently asked questions
What is the best Incoterm when importing from India?
Many importers use FOB (sea) or FCA (containers and air) because they keep control of freight while the Indian supplier handles export clearance. CIF or DAP can be simpler for small or first orders.
Who pays freight under FOB?
Under FOB the buyer pays the main sea freight. The seller pays costs up to loading the goods on board the vessel at the named Indian port.
Does CIF insurance fully cover my goods?
Under Incoterms 2020, CIF only requires minimum cover (Institute Cargo Clauses C). Ask the seller for broader cover, or arrange your own insurance, if you need more protection.
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