Incoterms for Importing from India: EXW, FOB, CFR and CIF Explained
Who pays for what under the four Incoterms used on most industrial export orders from India.
An Incoterm says who pays for what, and who carries the risk, between the supplier and the buyer. Four terms cover almost every industrial order shipped from India: EXW, FOB, CFR and CIF.
EXW: Ex Works
You collect the goods from the supplier's warehouse and handle export clearance, freight and insurance yourself. It gives the lowest price on paper and the most work for you.
FOB: Free On Board
The supplier clears the goods for export and loads them on your vessel at the Indian port, such as Mumbai or Nhava Sheva. You pay the sea freight and insurance. This suits buyers who have a freight forwarder and want to choose the carrier.
CFR: Cost and Freight
The supplier pays the freight to your port of discharge. You arrange insurance and import clearance. Risk passes to you when the goods are loaded on the vessel.
CIF: Cost, Insurance and Freight
As CFR, with marine insurance arranged by the supplier. It is common for first orders, since you receive one landed price to the port.
Which one should you choose?
If you have a trusted forwarder, FOB lets you control freight cost and timing. If you want one price to your port, ask for CFR or CIF. Always name the port: write 'CIF Jebel Ali' or 'FOB Nhava Sheva', not just 'CIF'.
Key Takeaways
- FOB: you buy the freight
- CFR and CIF: the supplier buys the freight
- Always name the port
- Insurance is separate under FOB and CFR
This article is general guidance. For a recommendation for your own application, contact our engineering team. See our export terms →