📦 Market Insight

Incoterms explained: FOB vs CIF vs EXW for first-time importers

A clear breakdown of which Incoterm protects your interests and how each affects your landed cost.

The Incoterm on a quote says who pays for freight and insurance, and where risk moves from seller to buyer. It does not replace the sales contract, and it does not pay your destination customs duty.

EXW (Ex Works) means you collect from the supplier's door. You arrange inland haulage in India, export clearance, ocean freight and insurance. It is the lowest product price and the most work. New importers usually should not start here.

FOB (Free On Board) is the usual first term for a named Indian port, such as FOB Cochin or FOB Chennai. Yugam delivers the goods on board the vessel and clears them for export. You book the freight and insurance from that point, and risk passes once the goods are on the ship. Your landed cost is the FOB price plus freight, insurance, destination charges and duty.

CIF (Cost, Insurance and Freight) includes ocean freight and a minimum cargo insurance to the destination port. Risk still passes at the Indian load port, not when the container arrives. CFR is the same without insurance. Compare quotes on the same Incoterm and the same port. A lower FOB number is not cheaper than CIF until you add the freight.