Incoterms (International Commercial Terms) define exactly which party — buyer or supplier — is responsible for freight, insurance, customs and risk at each stage of a shipment. Getting this wrong is one of the most common expensive mistakes first-time importers make: agreeing to a price without understanding what it does and doesn't include, then being surprised by freight, duty or inspection costs that weren't part of the quoted "price." This guide covers the four terms most relevant to buyers sourcing from India.
EXW (Ex Works)
Under EXW, the supplier's only obligation is to make goods available at their factory or warehouse. You (the buyer) arrange and pay for everything from that point on: loading, inland transport to the port, export customs clearance, main freight, import customs, and final delivery. EXW quotes look like the lowest number on paper, but they exclude the most cost and complexity — realistic only if you already have a freight forwarder and customs broker relationship, or work with a sourcing partner who arranges all of this on your behalf.
FOB (Free on Board)
Under FOB, the supplier handles inland transport, export customs clearance, and loading the goods onto the vessel at the departure port. Risk and further cost responsibility pass to you once goods are loaded. You arrange and pay for main freight, insurance, import customs, and final delivery. FOB is the most common term for buyers who already have their own freight forwarder for the international leg but don't want to manage inland logistics in the supplier's country.
CIF (Cost, Insurance and Freight)
Under CIF, the supplier additionally arranges and pays for main freight and marine insurance to your named destination port. You're still responsible for import customs clearance and final delivery from the port. CIF is useful if you don't have an existing freight relationship in the origin country, since the supplier's rate often bundles freight into a single number — though it's worth independently checking that bundled freight rate against a quote from your own forwarder, since it isn't always the cheapest option.
DDP (Delivered Duty Paid)
Under DDP, the supplier takes on the maximum responsibility: freight, insurance, import customs clearance, duties and delivery to your door. This is the simplest term for the buyer administratively, but it requires real trust in the supplier's ability to navigate your country's customs process correctly — errors in customs paperwork are still ultimately your legal problem as the importer of record, even under DDP.
A quick way to compare
Moving from EXW toward DDP shifts more cost and responsibility onto the supplier and more of the quoted price into a single number — convenient, but it also means less visibility into what you're actually paying for freight versus product. First-time importers without an existing logistics relationship often do best with FOB or CIF, paired with a sourcing partner who can advise on and coordinate the international leg, rather than jumping straight to EXW (too much to manage alone) or assuming DDP removes all their responsibility (it doesn't, legally).
Where Tiwari Groups International fits in
We quote clearly under whichever Incoterm suits your logistics setup, and for buyers without an existing freight relationship, we coordinate the international leg end-to-end rather than leaving you to arrange it separately. See our nine-step sourcing and export process for how freight, documentation and customs fit into a full order.