Pricing an export quote: from ex-works to CIF and beyond

Updated 15 Oct 2026

This guide is for exporters who need to send a price to an overseas buyer and want every cost covered. It shows how to build the price layer by layer from your factory cost, how each Incoterm changes what you include, and how to set the currency and validity.

Step 1: get your ex-works cost right

Start with what it costs you to have the goods packed and ready at your premises:

materials, labour, factory overheads and your share of fixed costs;
export packing, palletisation, marking and labelling to the buyer's requirements;
inspection, testing and certification the buyer or the market requires.

Leave GST out. Exports are zero-rated, so under a Letter of Undertaking you ship without IGST and claim a refund of input tax credit. Do account for the time your money is tied up until that refund arrives.

Step 2: add the costs to the port (FOB or FCA)

inland transport to the ICD, CFS or port, including container haulage;
CFS or ICD handling, stuffing, sealing and weighment for the verified gross mass (VGM);
terminal handling charges at origin, which the seller pays under FOB and FCA;
customs broker (CHA) fees, documentation and certificates such as a certificate of origin or phytosanitary certificate.

Ask your freight forwarder and customs broker for written quotes. These charges change with the port, the container size and the season.

Step 3: add freight and insurance (CFR, CIF, CPT, CIP)

Get a freight quote for the exact route and container type, including surcharges such as bunker or peak-season charges, and note its validity. Under CIF, Incoterms 2020 require the seller to buy insurance on at least Institute Cargo Clauses (C) for 110% of the contract value; under CIP the minimum rises to Institute Cargo Clauses (A). Your marine insurer will quote a rate on that sum.

Step 4: delivered terms (DAP, DPU, DDP)

For delivered terms you also pay destination terminal charges and onward delivery, and under DPU the cost of unloading. Under DDP you pay the import duty and taxes in the buyer's country too. Check the buyer's tariff, any additional duties and whether you need a local tax registration before you agree to DDP. Most first-time exporters should avoid it.

Step 5: finance, credit insurance and bank charges

Pre-shipment finance: interest on packing credit from the date of drawal to shipment. Rupee export credit may be eligible for interest subvention under Niryat Protsahan; ask your bank. The pre-shipment finance calculator estimates the cost.
Post-shipment finance: interest for the transit time plus any credit period you give, until the buyer pays.
ECGC premium: depends on the buyer's country, the payment term and the credit period. Estimate it with the ECGC premium calculator.
Bank charges: negotiation or collection charges, courier and SWIFT fees, and, if you need a confirmed letter of credit, the confirmation fee, which can be significant for higher-risk countries.

Step 6: commission, incentives and margin

If an overseas agent earns commission, build it in and show it on the shipping bill and invoice so that customs records and remittances match.

Export incentives such as RoDTEP and duty drawback are paid as a percentage of FOB value (often with a per-unit cap), so many exporters use them to sharpen the price. Treat them with care. Check your product's actual rate on the HS Code Finder, allow for the delay before credits are usable, and do not count a benefit that may end before you ship. RoDTEP is currently extended only to 31 December 2026, so a quote for shipments after that date should not rely on it.

Finally, add your profit margin. Set it on the full cost, not just the product cost.

What each Incoterm includes

Term	Your price covers	Use for
EXW	Goods packed at your premises; buyer loads and clears for export	Rarely suitable: you still need export clearance in your name
FCA	Goods cleared for export and handed to the buyer's carrier	Containers, air, any mode
FOB	Goods cleared and loaded on board the vessel	Sea; best for bulk or break-bulk
CFR / CPT	As FOB / FCA, plus main freight	CFR sea only; CPT any mode
CIF / CIP	As CFR / CPT, plus insurance (ICC C for CIF, ICC A for CIP)	CIF sea only; CIP any mode
DAP / DPU	Delivery to the named place (DPU includes unloading)	When you control freight to the buyer's door
DDP	Everything, including import duty and taxes	Only if you understand the buyer's tax rules

Risk passes at a different point from cost under the C terms: with CIF or CFR you pay freight to the destination, but risk passes to the buyer once the goods are on board in India.

Currency and validity

Quote in a currency the buyer accepts and your bank can handle, usually US dollars or euros. Invoicing in rupees is also permitted under RBI rules, where the buyer's bank can arrange it.
Convert costs at a realistic rate, such as the bank's buying rate or a forward rate you can actually book, not the day's headline rate. See managing currency risk.
State a validity period, for example 15 or 30 days, and make sure it does not run past the validity of your freight quote or raw material prices.
Name the Incoterm with the place and the version, for example "FOB Nhava Sheva, Incoterms 2020".

Common mistakes

Quoting CIF using last month's freight rate.
Forgetting finance cost for the credit period, or the ECGC premium on credit sales.
Pricing on incentives that your product does not get, or that may lapse.
Agreeing to DDP without checking the buyer's duty and tax.
Leaving out the place or Incoterms version, which invites disputes over who pays what.

Related on Exportsmitra

Sources

Last checked 1 October 2026. Rules change: confirm with your bank and your freight forwarder before you act.

Spotted something out of date? Tell us

Our guides are drafted with the help of AI and checked against official sources, but rules change often and mistakes can slip through. Please confirm with DGFT, CBIC, RBI, ECGC or your bank before you act. General information only, not legal or financial advice.