export-tips

Choosing the Right Incoterm for Your Indian Commodity Import

FOB vs CIF vs CFR — each term shifts costs, risks and responsibilities differently. Here is a practical breakdown for first-time importers.

February 28, 2026

7 min read

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RNG Trade Intelligence

Market Research Desk · Rajkot

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Choosing the right Incoterm is the single most consequential decision in any commodity import contract. The term you select determines who pays freight and insurance, who carries risk while goods are at sea, and at what point title transfers from seller to buyer.

FOB (Free On Board)

Under FOB Mundra, the seller delivers goods on board the vessel at the named port. Risk and cost transfer to the buyer once the goods cross the ship rail. FOB is the most flexible option for buyers with their own freight relationships and gives the importer full control of ocean carriage and insurance.

CFR (Cost and Freight)

CFR includes ocean freight to the destination port but not insurance. The buyer carries the cargo risk during transit. This term suits buyers who prefer the seller to arrange shipping but want to control insurance independently.

CIF (Cost, Insurance and Freight)

CIF includes both freight and a minimum-cover marine insurance policy paid for by the seller. Risk still passes at the loading port even though the seller arranges insurance. New importers often start with CIF for simplicity.

Practical recommendation

For first-time Indian-origin imports, CIF is usually the safer starting point. As volume grows and your team builds freight relationships, FOB unlocks 3–6% landed-cost savings on most lanes.

Need help structuring your Incoterm contract?

RNG Agro Exports operates under FOB, CFR, CIF and DAP terms across 30+ markets. Our trade desk will recommend the optimal Incoterm for your route and risk appetite.

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Export Tips, Incoterms, FOB, CIF, CFR