Buyer guide
FOB or CIF: which should you ask for when importing packaging from India?
Ask for FOB if you have a freight forwarder who already ships for you, and CIF if you want one price that includes sea freight to your port. Under both Incoterms the risk passes to you once the goods are loaded on board at the Indian port; the difference is who books and pays for the sea freight and the insurance.
Published · Letap International, Mumbai
What each term covers
| FOB (Free On Board) | CIF (Cost, Insurance and Freight) | |
|---|---|---|
| Export clearance in India | Seller | Seller |
| Loading on board at the Indian port | Seller | Seller |
| Sea freight to your port | Buyer | Seller |
| Marine insurance | Buyer, if wanted | Seller, at minimum cover |
| Risk passes to the buyer | On board, at the Indian port | On board, at the Indian port |
| Import clearance, duty and delivery inland | Buyer | Buyer |
A CIF price is not a landed cost. Import duty, destination port charges and delivery from the port are still yours to pay.
When FOB makes sense
- You already have a forwarder, or negotiated freight rates.
- You consolidate goods from several suppliers into one shipment.
- You want to choose the shipping line and sailing yourself.
When CIF makes sense
- It is a first order and you do not yet have a forwarder.
- You want to compare suppliers on a price that already includes sea freight to your port.
- The order is small enough that arranging freight yourself costs more time than it saves.
Check the insurance on a CIF quote
Incoterms 2020 only require the seller to buy minimum cover under CIF — Institute Cargo Clauses (C), which insure against major casualties such as fire, sinking or stranding rather than all risks. For glass in particular, ask whether wider cover is included, or insure the shipment yourself.
A note on containers
Strictly, the International Chamber of Commerce intends FOB and CIF for goods loaded over the ship's side; for containers handed over at a terminal it points to FCA and CIP instead. In practice most packaging still trades on FOB and CIF, and if your bank or company policy requires a specific term, put it in the enquiry.
How Letap quotes
Letap International quotes FOB or CIF, loading from any major Indian port, whichever suits the consignment. It exports to the United States, the United Kingdom, South Africa, West Africa, East Africa and the Middle East.
Send the reference code (or a specification), the quantity and your destination port. The reply gives FOB or CIF pricing, the minimum order quantity and the lead time, usually within two working days. The invoice, packing list, certificate of origin and inspection paperwork are issued by Letap itself rather than a broker.