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Practical guide
The Incoterm on the invoice sets who pays for transport, who handles customs and who bears the loss if something goes wrong. This guide helps you choose the right Incoterm between India and France.
The International Chamber of Commerce (ICC) publishes the Incoterms. These rules split transport costs, risks and formalities between seller and buyer. Price, payment and transfer of ownership belong in the sales contract.
Seven apply to any mode of transport, four to sea and inland waterway transport only (FAS, FOB, CFR, CIF).
Under the C rules (CPT, CIP, CFR, CIF), the seller pays freight to destination, but risk passes to the buyer at origin. It is the most common source of misunderstanding.
After “FCA”, write a precise place: an address, a warehouse or a terminal. Responsibility changes hands at that point.
Incoterms® 2020 are the current reference. An earlier version can still be used if the contract names it: state the year in your documents.
Who pays for each leg of the journey, and where risk changes hands. Scroll the table sideways on mobile.
| Incoterm | Loading at origin | Export customs | Pre-carriage and origin port fees | Sea freight | Arrival fees | Import customs, duties and taxes | Final delivery |
|---|---|---|---|---|---|---|---|
| EXWAny mode | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer | Buyer |
| FCAAny mode | Seller | Seller | Seller | Buyer | Buyer | Buyer | Buyer |
| CPTAny mode | Seller | Seller | Seller | Seller | Seller | Depends on the carriage contract | Buyer |
| CIPAny mode | Seller | Seller | Seller | Seller | Seller | Depends on the carriage contract | Buyer |
| DAPAny mode | Seller | Seller | Seller | Seller | Seller | Seller | Buyer |
| DPUAny mode | Seller | Seller | Seller | Seller | Seller | Seller | Buyer |
| DDPAny mode | Seller | Seller | Seller | Seller | Seller | Seller | Seller |
| FASSea only | Seller | Seller | Seller | Buyer | Buyer | Buyer | Buyer |
| FOBSea only | Seller | Seller | Seller | Buyer | Buyer | Buyer | Buyer |
| CFRSea only | Seller | Seller | Seller | Seller | Seller | Depends on the carriage contract | Buyer |
| CIFSea only | Seller | Seller | Seller | Seller | Seller | Depends on the carriage contract | Buyer |
How to read it: under FCA, the seller pays until the goods are handed over at the named place (for groupage, our departure CFS warehouse), then the buyer takes over. Cells marked “depends on the carriage contract” depend on what the freight price includes: check each quote.
| Incoterm | Mode | Risk passes to the buyer… | Main freight | Insurance | Export customs | Import customs |
|---|---|---|---|---|---|---|
| EXWEx Works | Any mode | At the seller’s premises, goods made available (not loaded) | Buyer | Not required | Buyer | Buyer |
| FCAFree Carrier | Any mode | Handed to the buyer’s carrier at the named place | Buyer | Not required | Seller | Buyer |
| CPTCarriage Paid To | Any mode | Handed to the first carrier | Seller | Not required | Seller | Buyer |
| CIPCarriage and Insurance Paid To | Any mode | Handed to the first carrier | Seller | Seller, broad cover (clauses A) | Seller | Buyer |
| DAPDelivered At Place | Any mode | At destination, ready for unloading | Seller | Not required | Seller | Buyer |
| DPUDelivered at Place Unloaded | Any mode | At destination, unloaded | Seller | Not required | Seller | Buyer |
| DDPDelivered Duty Paid | Any mode | At destination, ready for unloading | Seller | Not required | Seller | Seller (duties and taxes included) |
| FASFree Alongside Ship | Sea only | Alongside the vessel, port of loading | Buyer | Not required | Seller | Buyer |
| FOBFree On Board | Sea only | On board the vessel, port of loading | Buyer | Not required | Seller | Buyer |
| CFRCost and Freight | Sea only | On board the vessel, port of loading | Seller | Not required | Seller | Buyer |
| CIFCost, Insurance and Freight | Sea only | On board the vessel, port of loading | Seller | Seller, minimum cover (clauses C) | Seller | Buyer |
Where insurance is “not required”, neither party has to insure: it is up to whoever bears the risk to protect themselves. We offer ad valorem cover based on the value of the goods, whatever the Incoterm.
Our recommendations for small volumes, depending on the direction of your shipment.
In groupage, the seller hands the goods to the consolidation warehouse (CFS) several days before loading on board. Under FOB, the seller stays liable during that time without controlling the operations. The ICC therefore recommends FCA for containerised goods. We accept both and advise you case by case.
State the rule, the precise place and the Incoterm version.
FCA CFS Nhava Sheva, Navi Mumbai, India – Incoterms® 2020
DAP customer’s warehouse, Pune, India – Incoterms® 2020
Send us the pro forma invoice before you sign it: we check that the Incoterm matches the service you want.
No, but without one, the split of costs and risks depends on the law governing the contract, which invites disputes. In practice, customs and banks expect it on the invoice.
The buyer. Under DAP the seller delivers to destination, but import clearance, duties and VAT remain the buyer’s responsibility.
Only under CIF and CIP, where the seller must insure the goods for the buyer’s benefit. In other cases we recommend it: sea carriers’ liability is capped, usually below the value of the goods.
No. The sales contract and the applicable law govern the transfer of ownership.
Yes, if the contract refers to them. Use the 2020 version, which created DPU and strengthened insurance under CIP.
Incoterms® is a registered trademark of the International Chamber of Commerce. This guide provides general information and does not replace the official ICC text or legal advice tailored to your contract.
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