FOB, CFR and CIF for importers: which delivery term to choose
Delivery terms decide who arranges and pays for shipping, and who carries the risk if something goes wrong. They are defined by the International Chamber of Commerce as Incoterms. For sea freight from India the three you will see most are FOB, CFR and CIF.
FOB: Free On Board
The seller delivers the goods on board the ship at the Indian port and pays the costs up to that point, including Indian export clearance. From that moment you carry the risk and you pay the sea freight and insurance. FOB suits importers who have their own freight forwarder and want to choose the shipping line and compare freight rates.
CFR: Cost and Freight
The seller arranges and pays the sea freight to your port. The risk still passes to you when the goods are on board in India, so you should insure the cargo yourself. CFR suits buyers who want a single price to their port but prefer to arrange their own insurance.
CIF: Cost, Insurance and Freight
CIF is CFR plus the seller buying minimum insurance for you. The risk still passes at the Indian port, but you are covered if the cargo is lost or damaged at sea. The minimum cover is basic, so buyers with high-value cargo often add their own policy.
What is not included in these prices
None of these terms include import duty, taxes, port charges and trucking at your end. Your clearing agent quotes those separately. Compare offers on the same basis: a CIF price and an FOB price are not comparable until you add freight and insurance to the FOB price.
Which should you choose?
- You have a trusted forwarder: FOB.
- You want one price to your port: CIF.
- You are new to importing: CIF, with the freight quote broken out so you can check it.
We quote FOB or CIF on request. Tell us your port and we quote both.
Planning an order? Ask for a quote.
Tell us the product, quantity and destination. A named export manager replies with specifications, price and the import documents for your country.
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