"What is your price?" means something different to every export buyer. A price ex-factory in Mumbai and a price delivered to a shop in London can differ by 20% or more once freight, clearance, duty and insurance are added. Incoterms, the international trade terms published by the International Chamber of Commerce, give both sides a shared language for who pays what and where the risk passes. The current set is Incoterms 2020.
The terms jewellery exporters actually use
| Term | Seller pays up to | Risk passes to buyer |
|---|---|---|
| EXW (Ex Works) | Goods ready at the factory | At the factory |
| FCA (Free Carrier) | Handing to the buyer's carrier, export-cleared | At handover to the carrier |
| FOB (Free On Board) | Loading on the vessel at the Indian port | On board the vessel (sea only) |
| CIF (Cost, Insurance, Freight) | Sea freight and insurance to the destination port | On board in India |
| CPT / CIP | Carriage (and insurance for CIP) to the destination | At handover to the first carrier |
| DAP (Delivered At Place) | Delivery to the buyer's address, not import duty | At the buyer's address |
| DDP (Delivered Duty Paid) | Everything, including import duty and taxes | At the buyer's address |
A note on FOB and CIF
FOB and CIF are sea freight terms. Jewellery usually travels by air or courier, where the matching terms are FCA (instead of FOB) and CPT or CIP (instead of CIF). Many buyers still say "FOB Mumbai" out of habit. If you agree FOB for an air shipment, write down exactly what it includes so there is no argument later.
Which term should you offer?
- EXW is simplest for the seller, but the buyer then has to handle Indian export clearance, which a foreign buyer usually cannot do alone. In practice, for Indian exports, FCA is often the better "minimum" term.
- FCA or FOB Mumbai suits buyers who have their own forwarder or courier account.
- CIP, CIF or DAP suits buyers who want a delivered price but will clear customs themselves.
- DDP means you pay the buyer's import duty and taxes. It is attractive to small buyers but risky for you: you must know the duty rate, and in some countries a foreign seller cannot easily act as importer. With US tariffs changing in 2025 and 2026, avoid DDP there unless your courier guarantees the duty amount.
A worked example
Suppose the factory price is Rs 250 per necklace set, and the buyer orders 400 sets.
| Step | Cost |
|---|---|
| Goods, 400 sets at Rs 250 | Rs 1,00,000 |
| Export packing and documents | Rs 3,000 |
| Local transport to airport and export clearance | Rs 4,000 |
| FCA Mumbai price | Rs 1,07,000 |
| Air freight to destination, example | Rs 18,000 |
| Insurance, example | Rs 1,000 |
| CIP destination airport price | Rs 1,26,000 |
| Destination clearance and delivery, example | Rs 7,000 |
| DAP buyer's address price | Rs 1,33,000 |
| Import duty and taxes, depends on country | added for DDP |
The figures are only an illustration. The point is that the same goods can be quoted at Rs 268 or Rs 333 per set, and both are "correct" for their Incoterm. Always state the term and the named place: "FCA Mumbai Airport", "CIP London Heathrow", "DAP Leicester".
Currency and validity
- Quote in the buyer's currency or in USD, and state how long the quote is valid.
- For made-to-order jewellery, fix the price at order confirmation, since production takes weeks.
- State who pays bank charges.
GST and the export price
Exports from India are zero-rated. With a Letter of Undertaking (LUT), you export without charging IGST, so your export price has no Indian GST in it. Without an LUT you pay IGST and claim a refund. See GST and the LUT for jewellery exports.
Mistakes in export quotes
- No named place. "FOB" alone does not say which port or airport. Always write "FCA Mumbai Airport" or "FOB Nhava Sheva".
- Using sea terms for courier. CIF and FOB are for sea freight. For courier and air, use FCA, CPT, CIP or DAP.
- Forgetting export clearance under EXW. The foreign buyer cannot easily clear goods out of India, so EXW often causes delays. FCA is usually better.
- DDP without knowing the duty. Where tariffs change, as in the US, DDP can wipe out the margin.
- Open-ended validity. A quote without an expiry date can be accepted months later at old prices. State "valid for 30 days".
- Currency not stated. "Price 3.50" could be dollars, euros or pounds. Write the currency every time.
How Jagruti quotes
We quote export orders ex-works or FOB/FCA Mumbai as standard, and can quote to a destination when you give us the delivery details. Our quote lists design codes, quantities, unit prices, the Incoterm and the delivery time. See our export supply page or ask for a quote.
Related: export payment terms and courier vs air cargo.