Incoterms 2020 Explained for Buyers of Indian Handicrafts: EXW, FCA, FOB, CIF and DDP
Updated: Oct 6
Every quote from an Indian supplier comes with a shipping term such as EXW, FOB or CIF. These are the Incoterms 2020 rules, published by the International Chamber of Commerce (ICC). They decide who pays for each part of the journey and when the risk moves from seller to buyer. Choosing the right one can save you money and trouble.
The basics
Incoterms 2020 came into effect on 1 January 2020 and contains 11 rules. Seven can be used for any mode of transport. Four are only for sea and inland waterway: FAS, FOB, CFR and CIF. As of September 2026, Incoterms 2020 is the current version.
The six terms handicraft buyers use most
EXW (Ex Works)
The seller makes the goods available at their premises. You arrange and pay for everything after that, including export clearance in India. It gives you full control but needs a forwarder in India.
FCA (Free Carrier)
The seller clears the goods for export and hands them to your carrier at an agreed place. The ICC says FCA suits any mode and is the appropriate rule for goods in containers (ICC Academy).
FOB (Free On Board)
The seller clears export and loads the goods on the vessel at the Indian port. Risk passes to you once the goods are on board. FOB is only for sea freight.
CIF (Cost, Insurance and Freight)
The seller pays freight and minimum insurance to your port, but risk passes to you when the goods are loaded in India. Check the insurance cover. The minimum may not be enough for fragile items such as ceramics.
DAP (Delivered At Place)
The seller delivers to your named place, ready for unloading. You handle import clearance and duties.
DDP (Delivered Duty Paid)
The seller handles everything, including import duty in your country. It is convenient, but costs are higher and the seller needs to be able to clear customs in your country.
The US International Trade Administration has a useful summary of all 11 rules.
Which term should you choose?
You have a forwarder in India or consolidate from several suppliers: EXW or FCA.
You ship full containers by sea and want your own freight contract: FOB, or FCA for containers.
You want a simple landed quote to your port: CIF, with extra insurance for fragile goods.
You are a small retailer who wants door delivery: DAP by courier for samples, and discuss DDP only if your supplier can handle import clearance.
Common mistakes
Using FOB or CIF for air shipments. Use FCA, CPT or CIP instead.
Forgetting local charges. Terminal handling and documentation fees can surprise you at both ends.
Assuming CIF insurance covers breakage in full. It often covers only a minimum level.
Writing just "FOB India". Always name the place, for example "FOB Nhava Sheva, Incoterms 2020".
How we quote
Our product prices are ex-works and we can also quote FOB or CIF to your port. Sample orders usually travel door to door by courier. Browse our products and ask for a quote with your preferred term.
Frequently asked questions
What is the difference between FOB and CIF?
Under both, risk passes to the buyer when goods are loaded in India. Under CIF the seller also pays sea freight and minimum insurance to your port.
Can FOB be used for air freight?
No. FOB is for sea and inland waterway only. Use FCA, CPT or CIP for air shipments.
Is Incoterms 2020 still current?
Yes. As of September 2026, Incoterms 2020 is the version in use. Always write the version after the term, for example FOB Mundra, Incoterms 2020.
Related reading
Kraft Bharat is one of the handicraft exporters in India supplying handmade products to retailers in the UK, US, Australia and UAE. Browse our catalogue or contact our export team.
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