The three letters are not a price, they are a dividing line
An Incoterm answers three questions at once: who arranges carriage, who pays for what, and where risk passes from seller to buyer. It does not say who owns the goods, it does not set payment terms, and it is not insurance cover by itself.
So "is CIF cheaper than FOB?" is the wrong question. A CIF price includes freight and insurance that you would otherwise buy yourself; an FOB price does not. Compare landed cost, not the number on the quote.
The terms you will meet, in order of how much the seller does
| Term | Seller does | You do | Risk passes |
|---|---|---|---|
| EXW | Makes the goods available at the works | Everything: loading, export clearance, carriage, insurance, import | At the seller’s premises |
| FCA | Hands over, export cleared, at the named place | Main carriage onward, insurance, import | On handover to your carrier |
| FOB | Delivers on board the vessel at the port of shipment | Sea freight, insurance, import | Once on board |
| CFR | As FOB, plus pays sea freight to the destination port | Insurance, import | Still once on board, not on arrival |
| CIF | As CFR, plus buys a minimum insurance cover | Import clearance, duty, inland carriage | Still once on board |
| DAP | Delivers to the named place in your country, not unloaded | Import clearance and duty | At that named place |
FOB, CFR and CIF are for sea freight. FCA and DAP suit container, road or air movements and are the ones to use when nothing is loaded onto a vessel in the usual way.
The trap in CFR and CIF
Under CFR and CIF the seller pays the freight all the way to your port — but risk still passes when the goods are on board at the Indian port, not when they arrive. If a container is lost or damaged in transit, it is your loss even though the seller booked and paid for the voyage.
That is the whole reason insurance belongs in the conversation. Under CIF the seller buys cover, but the minimum level the rules require is a basic one. If your cargo warrants more than that, say so in the contract or arrange your own.
Which term suits a nonwoven order
- You already have a freight forwarder in India — FOB or FCA, and keep control of the booking
- You want one landed number and little involvement — CIF or DAP
- The order is small or consolidated with other suppliers — FCA to your consolidator
- You are new to importing from India — CIF is the simplest first order; move to FOB once you have a forwarder you trust
There is no term that is generally better. The right one depends on who has the better freight rate and who is equipped to handle a problem at sea.
What we do, and what we do not
We make and supply the material, and we coordinate dispatch to your port. We are not a freight forwarder, a customs broker or an insurer, and we do not give customs or tax advice for your country. Duty, import clearance and any local compliance are yours, whatever the term says about carriage.
Tell us the term you want with the enquiry. Quoting EXW against a competitor’s CIF and calling it cheaper would be a false comparison, so we will quote on the basis you name.
Write it down properly
An Incoterm is incomplete without a named place: "FOB Mundra", "CIF Jebel Ali", "DAP Nairobi". "FOB India" is not a term, it is an argument waiting to happen.
Name the edition of the rules in the contract too, and confirm the current edition with your broker — they are revised periodically, and the obligations under the same three letters have changed between editions.
What to send with your enquiry
- The term and the named place you want quoted — for example CIF Durban
- Destination port, and the forwarder you use if you have one
- The specification: application, fibre, GSM, width, roll length, quantity
- Whether you want the material consolidated with anything else
Send it through the enquiry form. The quote checklist covers the specification side, and roll weight and coverage helps you work out quantity and how it loads.
Questions
Is CIF cheaper than FOB?
Neither is cheaper; they include different things. A CIF price carries freight and a basic insurance cover that under FOB you buy yourself. Compare the landed cost at your door, not the two quoted numbers.
Under CIF, when do the goods become my risk?
When they are on board the vessel at the port of shipment, not when they arrive. The seller pays the freight to your port, but a loss in transit is yours. That is why the insurance arrangement matters.
Which Incoterm should a first-time importer use?
CIF is usually the simplest, because the seller arranges the voyage and you take over at your own port. Once you have a forwarder you trust in India, FOB or FCA often gives better control and a better freight rate.
Do you arrange shipping and insurance?
We coordinate dispatch to your port and quote on the term you name. We are not a freight forwarder, customs broker or insurer, and we do not advise on duty or clearance in your country.
What do I need to write in the contract?
The three letters, a named place, and the edition of the rules — for example "CIF Jebel Ali, Incoterms [edition]". Confirm the current edition with your broker, since the obligations under the same letters have changed between editions.
