Incoterms Explained: FOB vs CIF for Indian Agro Exports
Confused about shipping terms? Here's a plain-English guide to FOB, CIF, CFR and what they mean for your import costs.
By SeourExim Export Team · May 2026 · 5 min read
FOB (Free On Board)
Under FOB, the seller delivers the goods loaded on the vessel at the named Indian port (typically Mundra, Nhava Sheva, or Tuticorin). The buyer pays ocean freight, marine insurance, and all destination charges. Best for buyers with their own forwarder relationships.
CFR (Cost and Freight)
CFR is FOB plus ocean freight to the destination port. The seller arranges shipping; the buyer arranges insurance and handles customs at destination. A good middle ground for buyers without an established freight forwarder.
CIF (Cost, Insurance, Freight)
CIF is CFR plus marine insurance. The seller covers everything up to the destination port. Simplest for first-time buyers but typically 3–5% more expensive than arranging your own freight and insurance.
Which to Choose
Experienced importers shipping more than 10 containers a year almost always choose FOB — they get better freight rates than the seller can negotiate. New importers should start with CIF for simplicity, then switch as volumes grow.
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