International Quotation with Incoterms: EXW, FOB, CIF, DDP Explained

Understand EXW, FOB, CIF, and DDP Incoterms before quoting international clients. Know who pays freight, insurance, and duties.

Why Incoterms matter in every export quote

Incoterms are internationally recognized rules published by ICC that define who pays for freight, insurance, customs, and duties at each stage of an international shipment. Without specifying an Incoterm, an export quote is incomplete and almost always leads to disputes. Always print the Incoterm and named place — for example, FOB Mumbai or DDP New York — on every international quotation. The current 2020 revision is what most contracts use today.

EXW: Ex Works

Under EXW, the buyer collects goods from your factory gate and handles everything from there — loading, freight, insurance, customs, and final delivery. This is the simplest term for the seller because liability ends the moment goods are made available. It is, however, the riskiest for the buyer, who must arrange Indian export clearance, which is legally the seller’s responsibility in practice. Use EXW only with experienced importers who have an Indian agent.

FOB and CIF: the workhorses of shipping

FOB (Free On Board) means the seller pays for inland transport and loading onto the vessel at the port of origin; risk transfers as goods cross the ship’s rail. CIF (Cost, Insurance, Freight) extends seller obligations to cover sea freight and minimum marine insurance up to the destination port. Both apply only to sea or inland waterway shipments — never quote FOB or CIF for air or courier. FOB is most common for export from Indian ports, while CIF is preferred by buyers who lack freight contracts.

DDP: Delivered Duty Paid

DDP is the buyer-friendliest term — the seller takes responsibility right up to the buyer’s door, including import duties and taxes in the destination country. It maximizes your quoted price but requires you to be a non-resident importer or work with a local customs broker. DDP is popular for samples, e-commerce, and high-value B2B sales where the buyer wants a single landed cost. Price it carefully because destination duties and VAT can swing your margin sharply.

Quote globally and stay GST-compliant with BillBabu

BillBabu supports multi-currency quotations, Incoterm fields, and export invoice formats including LUT and shipping bill references. You can save Incoterm-specific templates so your team picks the right clause automatically based on customer country. GST treatment for export of goods and services (zero-rated with or without LUT) is handled in the back end. Try it free at billbabu.com to quote international buyers with confidence.

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