Buying from India
How export pricing works: from ex-works to CIF
What goes into an Indian export price, how it builds from ex-works to FOB to CIF, and which factors move it. No price lists, just the structure.
Prices for agricultural and industrial products move with crops, grades and freight, so a number in an article would be out of date quickly. What does not change is the structure. Knowing it lets you compare quotations properly.
The build-up
| Stage | What is added |
|---|---|
| Ex-works (EXW) | Raw material procurement, processing and grading, packaging, quality control and lab testing |
| FOB | Inland transport to the port, customs clearance, port and terminal handling, documentation, bank and letter-of-credit charges |
| CFR | Ocean freight to the destination port |
| CIF | Marine insurance, in addition to freight |
Most quotations also include the exporter's margin and a small contingency for exchange-rate and cost movements.
What moves the price
- Product form and grade. This is usually the biggest driver. In tamarind, for example, the form (pod, block, concentrate, powder) matters more than anything else. See tamarind forms and grades.
- Crop and season. Raw material cost swings with the harvest, and some products are strongly seasonal.
- Packing. Retail packs and private label cost more than bulk bags.
- Order size. Full-container lots are priced lower per kilogram than small ones.
- Certification and testing. Organic or other certification, and broader lab panels, add cost.
- Incoterm. A CIF price includes freight and insurance that an FOB price does not, so the two are not directly comparable.
- Currency. Contracts in US dollars or euros carry exchange-rate risk against the rupee.
How to compare two quotations
- Put both on the same Incoterm. If one is FOB and the other CIF, add freight and insurance to the FOB.
- Check the specification is identical: the same grade, moisture, purity or mesh, and the same packing.
- Check what testing and which documents are included.
- Check the validity period and the payment terms.
Read FOB, CFR and CIF explained for the terms themselves.
This article is general information for importers. It is not legal, customs, financial or regulatory advice. Requirements change, so confirm them with your customs broker, freight forwarder or the relevant authority before you ship.
Keep reading
- 01
Indian Products
Tamarind forms and grades explained
Tamarind is traded in five very different forms. See how each is graded, what Brix and seed percentage mean, and how to avoid quoting the wrong product.
- 02
Buying from India
Understanding MOQ in export trade
Why exporters set minimum order quantities, how trial orders and container loads differ, and how to negotiate an MOQ that works for both sides.
- 03
Export Knowledge
FOB, CFR and CIF explained: Incoterms for sea freight
What FOB, CFR, CIF and EXW mean under Incoterms 2020, who pays for what, where risk passes and how to choose between them when buying from India.
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