A plain-English look at the three terms most food importers use, who pays for what, and which one suits a first-time buyer.
When you ask for a price, the first thing a good exporter will ask back is "on what terms?" The three you will meet most often in agri trade are FOB, CIF and DAP. They are not jargon for its own sake — they decide exactly where our responsibility ends and yours begins, and they change the number on the quote.
FOB — Free On Board
We deliver the goods, cleared for export, loaded on the vessel at the Indian port (usually Mundra or Nhava Sheva). From the ship's rail onward — sea freight, insurance, destination charges — it is your account, normally through your own freight forwarder. FOB suits buyers who already have a forwarder and want to control the shipping leg and cost.
CIF — Cost, Insurance and Freight
We arrange and pay the sea freight and marine insurance up to your destination port. You take over for import clearance, duties and inland delivery. CIF is the comfortable middle ground for many first-time buyers — one supplier handles everything to your port, and you only deal with your side once it arrives.
DAP — Delivered At Place
We deliver right to your nominated address — door to door — with duties and import taxes still on your account. DAP is the simplest for the buyer and the most hands-off, but it asks the most coordination from the supplier, so it is best on lanes we know well.
- Have your own forwarder and want control of freight? → FOB
- Want it handled to your port with minimum fuss? → CIF
- Want it at your door and will handle duties? → DAP
A word for first-time importers
If this is your first container from India, CIF is usually the easiest place to start — you get a single, comparable all-in price to your port without arranging freight yourself. Pair it with a small LCL trial order at a low MOQ, and you can test the product and the whole shipping process without a heavy upfront commitment. Once you are comfortable, many buyers move to FOB to shave cost on the freight leg.
Tip: Always compare quotes on the same Incoterm. An FOB price and a CIF price for the same goods are not the same number — the freight and insurance are simply sitting in different pockets.
Frequently asked questions
What is the difference between FOB, CIF and DAP for me as the buyer?
On FOB you arrange and pay ocean freight from Mundra or Nhava Sheva; on CIF we pay sea freight and marine insurance to your destination port; on DAP we deliver to your door and you pay the import duty and clearance. We can quote on any of the three.
Which term is easiest if this is our first import from India?
CIF is usually simplest for first timers because we handle freight and insurance to your port and you only manage clearance at your end. Once you have a freight forwarder you trust, many buyers switch to FOB.
On DAP, who handles the customs duty?
On DAP the duty and import clearance remain with you as importer of record; we cover transport to the named delivery place. We will set out exactly what is and is not included before you sign.
Can you lock the Incoterm and named port on the contract?
Yes. The Incoterm, named port or place and the spec all go on the sales contract so there is no ambiguity on who pays what.
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