Understanding Incoterms: FOB vs CIF vs EXW for First-Time Importers

Incoterms define who is responsible for shipping cost, insurance, and risk at each stage of an international shipment. The three you'll encounter most often when sourcing from India are EXW, FOB, and CIF.

EXW (Ex Works) means the buyer takes responsibility for the goods from the supplier's factory or warehouse, including all inland transport, export clearance, and shipping. FOB (Free on Board) means the supplier delivers the goods to the port and handles export clearance, with the buyer responsible for ocean freight and insurance from that point. CIF (Cost, Insurance, Freight) means the supplier arranges and pays for shipping and insurance to the destination port, with the buyer handling import clearance and inland delivery from there.

Most first-time importers find FOB the easiest starting point, since it limits their responsibility to arranging a freight forwarder for the ocean leg while still giving visibility into freight costs. Asra Global quotes FOB Nhava Sheva or Mundra by default, with CIF and DDP available on request.