FOB, CFR or CIF? Choosing Price Terms When You Buy from India

An export quote from India is almost always given as FOB, CFR or CIF. These are Incoterms, international rules that decide who pays for what and where the risk passes from seller to buyer.

FOB (Free On Board)

The price includes the goods, packing, inland transport to the Indian port (for example Nhava Sheva, Mumbai), export clearance and loading on the ship. You book and pay the ocean freight and insurance yourself. FOB suits buyers who have their own freight forwarder and good shipping rates.

CFR (Cost and Freight)

Everything in FOB plus ocean freight to your port. The exporter books the ship. Risk still passes to you once the goods are loaded in India, so you should arrange insurance. CFR is popular with buyers who want one simple landed-at-port price.

CIF (Cost, Insurance and Freight)

CFR plus marine insurance arranged by the exporter. It is common when the buyer's bank needs proof of insurance, for example with a letter of credit.

What none of them include

Import duty and taxes, unloading charges at your port, customs clearance in your country and delivery to your warehouse are always your cost under these three terms.

Which one to choose

First-time importers often prefer CFR or CIF because the exporter handles booking and the quote is easy to compare. As your volumes grow, compare the exporter's freight with your own forwarder's rate; switching to FOB can save money when you ship regularly.