There is no single best Incoterm, but most first-time importers from India choose between CIF or CFR to their own port, and FOB at the Indian port. CIF or CFR is simpler if you have no forwarder. FOB is better if you already have a forwarder you trust, because you control the shipping line, the booking and the insurance.
This is general guidance, not legal advice. The right term depends on your experience, your forwarder and how your bank or customs broker works.
When CIF or CFR suits you
- You have never booked ocean freight and have no forwarder yet.
- Your order is small and freight is a modest part of the total.
- The supplier ships your route often and gets reasonable rates.
- You want one landed price to compare quickly against other offers.
When FOB suits you
- You already import from Asia and have a forwarder with India coverage.
- You want to choose the line, transit time and free days at destination.
- You buy regularly and want freight costs you can see and negotiate.
- You want your own insurance with wider cover than the CIF minimum.
Traps for first-timers
Under CIF and CFR, the seller chooses the line. A cheap freight rate can come with short free time at your port, high destination charges, or a slow transhipment route. You pay those charges, not the seller. Ask what the line charges on arrival before you accept.
Under CIF, risk passes in India and the insurance is often minimum cover. Ask for the policy or certificate, the insurer, the cover clauses and how to claim in your country. If cover is thin, buy your own.
Under FOB, you must book in time. If your forwarder does not secure space and the supplier is ready, the goods sit at the factory or port. Agree who pays storage and how long the supplier will hold stock.
DAP sounds easiest, but you lose visibility on cost and routing, and the supplier adds a margin on freight. It also gives the supplier more to arrange in your country, which some Indian processors prefer not to do.
A sensible path
For a first container, many buyers ask for both an FOB and a CIF price. They then get a forwarder quote for the FOB option and compare the landed cost. If the gap is small and the CIF line is reasonable, CIF is fine for the first order. Move to FOB once you know the trade.
See the difference between FOB, CFR, CIF and DAP for the rules themselves, and how to choose a freight forwarder when you are ready to take over freight.
How Creston & Co handles this
We ask suppliers to quote on the same Incoterm so you compare like with like, and we can work with your forwarder on an FOB booking. Ask for a free sourcing review to decide the right starting term.