Imports & ExportsStart exporting

Section 09

Shipping and getting paid

How goods move from your gate to the buyer, who pays for what under each Incoterm, which port to use, and how to make sure the money comes back.

Incoterms
11
ways to get paid
6
gateways
23

Read first

Three things to understand

  1. 01How a shipment moves: factory to vesselThe path of a sea export, step by step — who does what, and where things usually get stuck.7 min →
  2. 02Pricing your export: EXW to FOB to CIFHow to build an export price cost by cost, with a worked example using made-up numbers.6 min →
  3. 03Getting paid: RBI rules, e-BRC and protecting yourselfHow long RBI gives you to bring export money home, how to prove it, and how to avoid buyers who never pay.7 min →

Incoterms 2020

Who pays, who carries the risk

Write the Incoterm and the named place on every quote and invoice — “FOB Nhava Sheva”, not just “FOB”. The bar shows how far along the journey the seller’s risk goes.

  1. EXWEx WorksAny transport
    Seller does
    Makes the goods available at its own premises, packed. Nothing more.
    Buyer does
    Loads, clears export customs, books freight, insures and imports.
    Risk passes
    Passes when the goods are placed at the buyer's disposal at the seller's premises.

    Risky for an Indian exporter: the export declaration must still carry your IEC, and you may not get proof of export for GST and benefits. Prefer FCA.

  2. FCAFree CarrierAny transport
    Seller does
    Clears export customs and hands the goods to the buyer's carrier at a named place.
    Buyer does
    Pays main freight, insurance, import clearance and duties.
    Risk passes
    Passes when the goods are handed to the carrier at the named place.

    The best choice for containers and air cargo when the buyer controls freight. It can allow an on-board BL to be issued to you for an LC.

  3. CPTCarriage Paid ToAny transport
    Seller does
    Clears export and pays freight to the named destination.
    Buyer does
    Pays insurance (if wanted), import clearance and duties.
    Risk passes
    Passes at the first carrier in India, even though the seller pays freight beyond.

    Cost and risk split at different points. Make sure someone insures the main journey.

  4. CIPCarriage and Insurance Paid ToAny transport
    Seller does
    As CPT, plus buys insurance to the destination — all-risks cover (Institute Cargo Clauses A) by default.
    Buyer does
    Import clearance and duties.
    Risk passes
    Passes at the first carrier, as in CPT.

    Price the higher insurance in. Incoterms 2020 raised the default cover for CIP.

  5. DAPDelivered at PlaceAny transport
    Seller does
    Delivers to the named place in the buyer's country, ready for unloading.
    Buyer does
    Unloads, clears import and pays duties.
    Risk passes
    Stays with the seller until the goods arrive at the named place.

    You carry the risk of delays and port charges abroad. Quote only when you know the destination costs.

  6. DPUDelivered at Place UnloadedAny transport
    Seller does
    Delivers and unloads at the named place in the buyer's country.
    Buyer does
    Clears import and pays duties.
    Risk passes
    Stays with the seller until the goods are unloaded.

    Rare for first exports. Replaced DAT in the 2020 rules.

  7. DDPDelivered Duty PaidAny transport
    Seller does
    Delivers to the buyer's door and pays import duty and taxes there.
    Buyer does
    Only unloads.
    Risk passes
    Stays with the seller all the way to the buyer's premises.

    Avoid as a beginner: you need to be able to import in the buyer's country, and duty or tariff changes come out of your margin.

  8. FASFree Alongside ShipSea and inland waterway only
    Seller does
    Clears export and places the goods alongside the vessel at the named port.
    Buyer does
    Loads, pays freight, insurance and import costs.
    Risk passes
    Passes when the goods are alongside the ship.

    Used for bulk and break-bulk cargo, not containers.

  9. FOBFree On BoardSea and inland waterway only
    Seller does
    Clears export and loads the goods on board the vessel the buyer names.
    Buyer does
    Pays sea freight, insurance, import clearance and duties.
    Risk passes
    Passes once the goods are on board.

    The most common term for Indian sea exports and the value customs records. For containers, ICC suggests FCA instead, because you hand over the box at the terminal, not on board.

  10. CFRCost and FreightSea and inland waterway only
    Seller does
    Clears export, loads and pays sea freight to the destination port.
    Buyer does
    Insures, pays destination charges, import clearance and duties.
    Risk passes
    Passes once the goods are on board in India.

    Popular with Gulf and Asian buyers. Get firm freight quotes before you offer; rates change weekly.

  11. CIFCost, Insurance and FreightSea and inland waterway only
    Seller does
    As CFR, plus buys minimum insurance (Institute Cargo Clauses C) to the destination port.
    Buyer does
    Destination charges, import clearance and duties.
    Risk passes
    Passes once the goods are on board in India.

    The buyer's customs usually charges duty on the CIF value. Shipping bill still declares FOB value.

Payment

How you get paid — safest first

For a first deal with a new buyer, take an advance or a letter of credit confirmed by a bank you trust. Open account is for buyers you already know.

  1. Low risk to youAdvance payment

    The buyer pays all or part of the value before you ship, by bank transfer to your account.

    First orders, small orders, new buyers and custom-made goods. Common 30% advance + balance before BL release.
  2. Low risk to youLetter of credit at sight

    The buyer's bank promises to pay when you present documents that match the LC. Payment follows soon after the bank checks them.

    Large orders, new buyers in distant markets. Safe only if your documents are perfect and the issuing bank is sound.
  3. Some riskUsance letter of credit

    Like a sight LC, but the bank pays on a future date (for example 90 days after BL). Your bank may discount it to pay you early.

    When the buyer wants credit but you want a bank's promise. Ask for confirmation if the issuing bank or country is weak.
  4. Some riskDocuments against payment (DP)

    Your bank sends the shipping documents to the buyer's bank, which hands them over only when the buyer pays.

    Known buyers. If the buyer refuses to pay, you still own the goods but must sell, return or abandon them abroad at your cost.
  5. High riskDocuments against acceptance (DA)

    The buyer gets the documents by signing (accepting) a bill of exchange promising to pay on a future date.

    Only with trusted buyers, and preferably with ECGC cover. The buyer has the goods before paying.
  6. High riskOpen account

    You ship and send documents directly to the buyer, who pays later as agreed (for example 60 days after invoice).

    Long-standing buyers and large retail chains. Use ECGC cover or factoring, and watch the RBI realisation deadline.

Ports

India’s main export gateways

  • Sea portJawaharlal Nehru Port (Nhava Sheva)MaharashtraINNSA1

    India's main container port, serving Mumbai, Pune and much of western and central India.

  • Sea portMundra PortGujaratINMUN1

    Large private port in Kutch; a common gateway for north-west India, rice, cotton and containers.

  • Sea portDeendayal Port (Kandla)GujaratINIXY1

    Major port in Kutch handling bulk cargo such as grains, salt and edible oils.

  • Sea portPipavav PortGujaratINPAV1

    Saurashtra port with rail links to north India.

  • Sea portHazira PortGujaratINHZA1

    Port near Surat serving south Gujarat industry.

  • Sea portChennai PortTamil NaduINMAA1

    Main east-coast container gateway for Tamil Nadu, Karnataka and Andhra exporters.

  • Sea portV.O. Chidambaranar Port (Tuticorin)Tamil NaduINTUT1

    South Tamil Nadu port used for textiles, coir, onions and food products.

  • Sea portCochin PortKeralaINCOK1

    Kerala's gateway for spices, seafood, coir and cashew.

  • Sea portVisakhapatnam PortAndhra PradeshINVTZ1

    East-coast port for Andhra Pradesh and Odisha; seafood, minerals and steel.

  • Sea portKrishnapatnam PortAndhra PradeshINKRI1

    Private port in Nellore district handling containers and bulk.

  • Sea portKolkata Port (Syama Prasad Mookerjee Port)West BengalINCCU1

    River port serving eastern India, Nepal and Bhutan transit cargo.

  • Air cargoDelhi Air Cargo (IGI Airport)DelhiINDEL4

    Busiest air cargo gateway for north India: garments, handicrafts, pharma and perishables.

  • Air cargoMumbai Air Cargo (CSMI Airport)MaharashtraINBOM4

    Major air gateway for pharma, gems and jewellery, and fresh produce.

  • Air cargoChennai Air CargoTamil NaduINMAA4

    Air gateway for south India's auto parts, electronics, leather and flowers.

  • Air cargoBengaluru Air Cargo (Kempegowda Airport)KarnatakaINBLR4

    Electronics, flowers, fruit and vegetables from Karnataka.

  • Air cargoHyderabad Air Cargo (Rajiv Gandhi Airport)TelanganaINHYD4

    Pharma and perishables hub for Telangana and Andhra.

  • Air cargoKolkata Air CargoWest BengalINCCU4

    Air gateway for eastern India, including fresh produce and leather.

  • Air cargoAhmedabad Air CargoGujaratINAMD4

    Air gateway for Gujarat's pharma, textiles and chemicals.

  • Inland container depotICD TughlakabadDelhiINTKD6

    Inland container depot for Delhi-NCR; customs clearance done here, then rail to the sea port.

  • Inland container depotICD DadriUttar PradeshINDER6

    Inland container depot in Gautam Buddh Nagar serving western UP and NCR.

  • Inland container depotICD Ludhiana (Dhandari Kalan)PunjabINLDH6

    Inland container depot for Punjab's hosiery, hand tools, cycle parts and rice.

  • Land portPetrapole Land Customs StationWest BengalINPTPB

    Main road border crossing to Bangladesh (Benapole on the other side).

  • Land portRaxaul Land Customs StationBiharINRXLB

    Main road crossing to Nepal (Birgunj on the other side).